Category Archives: Florida

Outrageously One-Sided Construction Defect Litigation Proposal in Florida

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guest blog by Deborah Goonan

As we gear up for the Legislative session in Tallahassee, beginning March 3, we are starting to hear the buzz about HOA-related bill proposals.

Florida HB 78, a proposed amendment to Statute 558, is among one of the most preposterous bills I have seen. Written by and for the benefit of general contractors and design professionals, the amended version seeks to substantially reduce their liability for construction defects.

As currently written, the bill proposes that owners and Associations meet difficult and costly legal standards prior to filing the initial claim. For instance, the claimant would have to provide a complete and detailed list of each instance of every defect and cite the specific code(s) violated, plus reference all pertinent spec sheets and project drawings, among other details. Essentially, the contractors are insisting that owners or Associations undertake the discovery process prior to filing the first defect claim.

Let’s say your condo building or HOA clubhouse has numerous water leaks. It would be up to your Association to hire the necessary experts to figure out the cause or causes of each and every leak, even if that means removing drywall to get to the plumbing, or removing earth from the foundation wall to look for cracks in the concrete slab. It means your HOA would have to hire an attorney to locate all of those pertinent documents that may have gone missing during the transition process. Then the attorney would have to work with experts to complete detailed reports to attach to the initial claim.

Thousands of dollars in legal costs can accumulate before the Contractor will even consider confidential settlement talks with the HOA or owners. Of course those settlements have to be confidential, so that future buyers will never know what kind of a time bomb they intend to purchase.

And if it turns out that the owners miss some hidden defects, too bad! If a judge decides that the Association is to blame for insufficient maintenance, then the HOA would be on the hook for all of the Contractors’ investigative and legal expenses! But if the Contractor turns out to be 100% to blame for shoddy construction, there is no equivalent sanction requiring that all of the HOA’s legal costs will be reimbursed. I have included a link to a Florida attorney’s blog and the bill itself below, for any skeptics among you who might think I am exaggerating.

This is the kind of legislation that, if enacted, will ensure full employment for construction defect attorneys all over the state of Florida, or alternatively, extort owners to simply pay dearly for all of the mistakes made – and corners cut – during construction.

(link to Florida HOA Lawyer Blog critique of HB 87)

(Florida HB 87 as filed)

Comcast Starts Billing Spokane, Washington Customer as “Asshole Brown”

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Homeowners are beleaguered enough with abusive HOA boards and managers.  Many of these HOAs require homeowners to only use the approved cable company to get cable TV and Internet services.

But telephone and TV providers have unparalleled records, themselves, when dealing with people trying to get changes in their service. I experienced the near impossibility of getting a change in my Century Link and Verizon phone service in Colorado last fall so I knows it goes on.

The story from Spokane, Washington linked below is beyond belief. When Ricardo Brown and his wife insisted in cancelling his cable, Comcast began sending bills to his home addressed to “Asshole Brown.”

Incredible!

http://www.huffingtonpost.com/2015/01/29/comcast-asshole-brown_n_6568238.html

 

Homeownership Rates Falling

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guest blog by Deborah Goonan

 Last week the Orlando Sentinel published an excellent but concise article about the decrease in homeownership rates in Central Florida. The Sentinel reports that homeownership rates have slipped from 77% a decade ago to 66% in 2014, and at only 59% in newer neighborhoods built in the past decade.

Florida, and the Orlando Metro area in particular, suffered some of the highest foreclosure rates in the nation. So naturally, a lot of former homeowners with poor credit have now become renters. Large real estate investment firms have snatched up distressed homes at bargain prices, and turned them into rental properties. Owners interviewed for the Sentinel article lament the fact that their neighborhoods have seen a substantial influx of out-of-state landlords leasing to transient renters, and a decline in yard maintenance and property values. Large real estate investment firms have no problem paying fees for various code violations, as they collect healthy rental income.

Long-time permanent residents express concern over the lack of community cohesion, brought about by the stark decrease in homeownership rates – in some communities, reportedly as low as 37%.

Unfortunately, no public entity bothers to collect vital data specific to HOAs. Data encompasses homeownership in general.

But since the vast, vast majority of homes in Florida are in some sort of HOA – particularly anything built in the last 30 years – might we safely assume a correlation between a high percentage of HOA properties, higher than national average foreclosure rates, and lower home ownership rates in “newer” communities? You make the call.

(link to Orlando Sentinel article, homeownership fades in Central Florida)

 

 

Builders, Professionals seek to avoid liability for Construction Defects, with support from local and state government

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guest blog by Deborah Goonan

Colorado has been making news on HOA websites lately. In direct contradiction to Colorado state law, Lakewood city officials have recently passed an ordinance that prevents condo owners from suing developers for construction defects.

There are two sides to the issue of construction defects. Builders want to avoid litigation in lieu of binding arbitration, with the opportunity to correct defects. They maintain that defects are often minor, or that defects are a result of poor maintenance by the HOA, rather than shoddy construction.

Homeowners, wary of uncooperative Builders that may drag their feet taking corrective action, or may balk at making necessary repairs, are reluctant to give up their legal rights to sue in the courts.

But Builders have an ally in the form of the Colorado Metro Mayor’s Caucus, pushing for statewide legislation that reduces builder liability for construction defects. You see, the Mayors believe that reducing liability for construction defects will reduce building costs, and convince Developers to build new affordable housing in the form of condominiums.

Instead of working in the best interests of constituents, writing legislation with balanced legal protections for condo owners, proposals aim to gut existing statutory rights to file a lawsuit, requiring mandatory arbitration instead. Anyone who has been involved in arbitration knows that the filing costs are substantial, with results usually slanted in favor of Big Business.

Avoidance of liability for construction defects is a hot button issue, so much so that Colorado attorneys are actually encouraging developers and general contractors to include mandatory arbitration clauses in the Condo and HOA governing documents. Attorneys also recommend requiring Developer approval to amend (or remove) that arbitration requirement following turnover to an owner-controlled Board. (See link below)

Critics in Colorado point out that affordability is probably more affected by factors such as student loan debt and stagnant wages, rather than higher building costs involved with obtaining construction insurance.

Meanwhile, on the east coast, there are similar ongoing battles in my home state of Florida.

In Florida, the controversy centers on whether or not developers, general contractors, and design professionals should be liable for construction defects affecting common area infrastructure – roads, storm water drainage systems and structures, street lighting, and other essential elements – that affect the habitability of homes a the subdivision.

In response to Maronda Homes vs. Lakeview Reserve, where Lakeview HOA sought to sue Maronda for defects that resulted in storm water flooding and deterioration of roadways, Developers and construction firms sought to avoid liability for defects to common areas that are “unattached” to the homes, or that do not result in direct damage to individual homes. In 2012, the Florida Legislature passed, and Governor Scott enacted, FL Statute 553.835, preventing HOAs from filing suit to recover damages from construction defects to common area infrastructure. Attorneys and homeowners alike opposed this consumer-unfriendly legislation, but real estate development interests lobbied for its passage, and most state Legislators voted in favor of the amendment. The law basically states that homeowners are stuck with the cost of making repairs to defectively constructed roads, storm water ponds, swales, underground drainage, and the like.

“Too bad – Buyer Beware!”

However, in 2013, the Florida Supreme Court found that 553.835 shall not be applied retroactively in the case of Maronda v. Lakeview. The Court also left the door open for a constitutional challenge in defect suits brought after July 1, 2012, when the law became effective. The statute still stands, awaiting that challenge.

In the meantime, design professionals (architects, engineers, designers, surveyors, etc.) successfully lobbied for passage of their own protective legislation, FL Statute 558.0035, limiting individual liability for professional negligence claims.

Notice that nobody seems to lobby for quality construction, and protection of owners’ health, safety, or financial interests. Instead, Legislative focus is on reducing construction and legal costs for builders and related professionals. While it makes sense to inhibit frivolous defect lawsuits or fraudulent claims, it makes no sense at all to eliminate accountability of Developers and others who designed and created HOA subdivisions for personal profit.

Furthermore, it is outrageous that legislators continue to circumvent the judicial process by passing laws that limit the rights of constituents.

Florida references:

Florida Supreme Court rules that a homebuilder’s implied warranties apply to subdivision improvements that provide “essential services” to homeowners

http://www.lexology.com/library/detail.aspx?g=7c45caa0-800b-4874-b394-b8957310cb50&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+Other+states+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2013-07-24&utm_term=

Florida Condominium Law Protects Condo Owners from Construction Defects

http://www.floridacondohoalawblog.com/2012/05/articles/construction-issues-contractual-disputes/florida-condominium-law-protects-condo-owners-from-construction-defects/

FL Statute 553.835 Implied warranties (effective July 1, 2012)

http://www.flsenate.gov/Laws/Statutes/2012/553.835

Florida Statute 558.0035: Limiting Design Professional Negligence – See more at:

http://www.jimersoncobb.com/blawg/2013/06/florida-statute-558-0035-limiting-design-professional-negligence/#sthash.4j7R4QnE.dpuf (effective July 1, 2013)

Colorado References:

Building lawsuits could be reformed

http://durangoherald.com/article/20141130/NEWS01/141139971/-1/taxonomy/Lawsuits-in-building-defects-may-be-reformed—

How to guarantee the HOA can’t litigate condo construction defect claims

http://www.lexology.com/library/detail.aspx?g=b768d3c2-c021-4701-83eb-59bdc1998b87

Damn That Old Timed Religion!

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There’s nothing that angers an HOA board or management company more than the discovery that a homeowner believes in Jesus or the Virgin Mary. Well, I take it back, any expression of belief in Judaism also pops their gaskets.

Enock and Ines Berluche, a couple in the Shingle Creek Reserve in Kissimmee, Florida have been battling their HOA over the past year because the HOA says it doesn’t allow yard statuary. You couldn’t tell that by driving through the neighborhood, of course. Lots of homeowners violate the “no yard art” rule with garden frogs, cherubs and statues of Greek goddesses showing (can I say it?) bare boobs. There was even an ‘illegal’ fountain on the lawn of the HOA president.

But when a new homeowner requested permission to put up small statues of The Virgin Mary and Jesus they were denied.

After media publicity and threats of discrimination lawsuits the Shingle Creek Reserve board finally got religion. They reversed themselves and allowed Mary and Jesus to stay. The only tragic part of the story is that the couple had to spend thousands of dollars in legal fees just to assert their rights. But that’s the story with most HOAs. It’s not about the rules or rights. It’s all about harrassment and humiliation of homeowners who don’t toe the line.

(link to statuary story on WFTV, Florida)