Warranty Claims

Florida’s Condominium Act requires that contractors and suppliers provide a warranty of fitness and merchantability as to work provided and materials supplied for condominium developments. So when the roofing work done on a condo’s boat storage building failed, the association called back the roofer who had performed the work. He tried unsuccessfully to repair the roof but eventually advised the association the problem was actually with the product and not his labor. The association then contacted the manufacturer; however, it too would not accept responsibility for the leaks.

In the suit that followed, the association opted to only go after the manufacturer and it relied solely on the guaranty provided by the manufacturer to the roofer to prove its case.  The association argued that it was the beneficiary of that warranty.

Not enough, said the court. To hold the manufacturer responsible under the Condominium Act, the association needed to allege more of a relationship. It needed to allege and show that the manufacturer “furnished, sold and/or delivered materials to the project.” This is what the statutory warranty calls for. Had it done that, the association’s complaint against the manufacturer may have carried the day. But without that specific allegation and proof, the association’s case against the manufacturer failed.

Understanding Construction Warranties

Generally, a construction warranty is the seller’s or builder’s promise that what was built was built right, and is fit for its intended purpose.  Construction warranties can be express or implied. Express warranties are contained in the contract and typically promise that the work is free from defects and conforms to contract documents. Implied warranties are either warranties implied by law or from the actions of the parties.  Common implied warranties include:

WARRANTY OF HABITABILITY

The seller or builder of a home promises that the structure is suitable for living. Some examples of conditions that can make a home “uninhabitable” include defective septic systems and faulty foundations.

WARRANTY TO CONSTRUCT IN GOOD, WORKMANLIKE MANNER

The contractor or builder agrees to perform work according to appropriate professional standards. The warranty applies to the quality of services provided, but does not apply to the quality of the materials themselves.

Know that in Florida there are distinct warranties which apply to condominiums and homeowners’ associations.  And like all things legal, one always needs to be careful in applying any one definition to a particular set of circumstances.

Statutory Timeframes for Construction Warranties

Knowing the applicable deadlines for bringing a construction warranty claim can make the difference between a win and a loss. Generally, a person has 4 years to bring a warranty claim in Florida, although there are exceptions and other rules that may come into play depending on the actual circumstances surrounding the claim.

Claims based on construction defects must be brought within 4 years of one of the following, whichever is latest: actual possession by owner, date of issuance of certificate of occupancy, date of abandonment of construction (if project not completed), or date of completion or termination of contract.  Many of these defects are latent – hidden or concealed such that they are not apparent from routine inspection, for example, a leaky roof. In cases based on latent defects, the discovery rule applies – owners must file suit within 4 years of the date the defect is discovered or should have been discovered.

In addition, Florida requires any claim based on the design, planning, or construction of an improvement to real property to be brought within 10 years. Called the “statute of repose”, the 10-year limit is an absolute bar to filing a claim regardless of the cause of action. Since construction claims can arise decades after a project’s completion, the statute serves to limit the time in which claims can be brought.

Finally, a common source of confusion is the 1-year repair or “callback” period in standard construction contracts. This is a contract provision that requires the owner to notify the contractor of a defect and provide that contractor an opportunity to fix or repair his work. If the owner fails to provide this notice, or hires another contractor, the owner cannot charge the original contractor the cost of these repairs. Some mistake the repair period for the general 1-year warranty on construction work, after which the owner cannot bring a claim. This is not the case. The callback period is simply a chance to fix or repair defective work, but it does not prevent the owner from bringing other warranty claims that may arise.