Lawsuit and New Laws Underscore Importance of Expeditious Inspections in New Communities

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by shareholder George T. Breur. The article, which is titled “Lawsuit and New Laws Underscore Importance of Expeditious Inspections in New Communities,” discusses how new amendments to the state’s laws and a recent lawsuit by the association for the Boca Bridges community in Boca Raton illustrate how owners in new communities must move quickly with property inspections immediately after assuming operational control of the association from the developer. It reads:

            . . . The lawsuit was filed in Palm Beach County Circuit Court by the Boca Bridges HOA against GL Homes, which is one of the largest homebuilders in Florida, as well as the company’s engineering and design firms behind its sprawling new gated community with 504 residences. The 157-page complaint is replete with highly detailed lists and hundreds of photographs depicting alleged defects and shoddy construction, leaving no doubt that the owners moved diligently with thorough inspections by qualified experts and engineers.

The suit specifically states that the alleged defects and deficiencies existed at the time of the turnover of control of the association from the developer to the owners in September 2022.  It alleges that the construction defects were latent, and their existence or causes were not readily recognizable by laypeople. The complaint further asserts that the developer failed to exercise reasonable diligence to detect the defects, and the association did not discover their existence or causes until after control of its board of directors was transferred to the owners.

Those owners prudently engaged independent experts to perform comprehensive inspections and evaluations of the common areas, and the lawsuit is based on their findings. The allegations and photos, which are quite extensive, identify a number of construction defects including ponding water and blistering on the clubhouse roof, where water intrusion is allegedly impacting the electrical room, and cracks in the ceiling and around windows. The suit also claims there are cracks on the water feature at the main entrance to the enclave, cracks on the windows of the gatehouse, cracks on the pool deck, and delaminated stucco on multiple bridges in the community.

The expert report attached to the complaint also depicts and describes significant failures with an air conditioning unit, leaking pipes, improperly installed pavers, and exposed unsafe wiring in multiple locations throughout the community.

The suit alleges the homebuilder and design professionals were negligent, breached implied warranties, and failed to comply with the building code and Florida law. It was filed on June 28, which was just three days prior to the July 1 expiration of the grace period for Florida’s previous Statute of Limitations and Statute of Repose.

Those statutes set limits on the timeframe during which community associations and other property owners must file lawsuits concerning construction and design defects. Last year’s changes, which are now in effect, impact new residential and commercial properties as well as restoration projects.

The Statute of Repose terminates a right to file suit after a specified period of time has elapsed, regardless of whether an aggrieved owner has discovered a potential claim or a cause of action has accrued, whereas the Statute of Limitations sets the timeframe to file suit and begins to run when a claim is discovered or should have been discovered. Any claim for construction or design defects must be brought before expiration of the Statute of Repose.

Previously, the Statute of Repose for construction defect lawsuits was 10 years after the date of actual possession by the owner or the date of the issuance of a certificate of occupancy, whichever was latest. As of July 1, construction/design lawsuits must now commence within seven years rather than 10 of the date of the temporary certificate of occupancy, certificate of occupancy or certificate of completion, whichever was earliest.

Similarly, the four-year Statute of Limitations concerning known deficiencies used to commence on the date of actual possession by the owner or the issuance of the certificate of occupancy, whichever was latest. The law now requires claims to be filed within four years of the issuance of a temporary certificate of occupancy, certificate of occupancy or certificate of completion, whichever is earliest.

Florida law allows developers to maintain control of the associations for their new communities for up to seven years under certain circumstances. Such a scenario could effectively eliminate any rights of owners to assert claims for construction defects under the new seven-year period of repose.

As a result of last year’s amendments, community associations at turnover should expeditiously retain highly qualified experts to guide them through the transition period and conduct all the necessary inspections.  Any resulting defect lawsuit should be filed by experienced construction attorneys who have confirmed that it will not be time-barred under the shortened periods of limitations and repose. . .

George concludes his column by noting that by filing prior to July 1, the Boca Bridges association will have the benefit of the prior statutes of limitations and repose. That opportunity is no longer available for future cases, so he notes that owners in new communities would be wise to take a page from this community’s playbook and move swiftly to detect any defects and file any potential claims.

Our firm salutes George for sharing his insights into the takeaways from this recent lawsuit as well as last year’s changes to Florida law with the readers of the Miami Herald. We write about important matters for community associations in our Miami Herald column, which appears every two weeks on Sundays, and we encourage association directors, members and property managers to click here and subscribe to our newsletter to receive our future articles.