Bill seeks time to cure defects before buyers of homes can sue
April 21, 2003
By: Terry Sheridan
One thing is certain about a proposal to curb lawsuits over residential construction
defects: The devil's in the details.
And so are the lawyers.
Poised to go before lawmakers for a vote later this week, the bill would establish a
prelawsuit screening process akin to that used in medical malpractice claims.
Homeowners who discover construction defects would have to follow a prescribed procedure
and timetable before they could sue a contractor, subcontractor, supplier or design professional. Dissatisfied homeowners who try to bypass
the system and sue straightaway would find their lawsuits abated until they get with the program.
"When you buy a new car, you get a warranty and, if you have a problem, you don't
go and sue Ford Motor Co.," said Doug Buck, lobbyist for the Florida Homebuilders Association in Tallahassee. "You take it to
a Ford dealer and say, 'Fix it.' "
The extra time it takes for a homeowner to fix a problem or settle a lawsuit only worsens
a construction defect and makes it costlier to correct, he said.
The proposed law is similar to legislation in other states.
The bill's sponsor, state Sen. Michael S. Bennett, R-Bradenton, is an electrical contractor.
The builders group pushed the proposal because of growing numbers of lawsuits over building
defects, Buck said. The increased litigation is making it difficult for builders to get liability insurance.
Sam Miller, spokesman for the Florida Insurance Council in Tallahassee, pointed to mold
lawsuits as the fungus behind the proposal.
Mold lawsuits are the only type of construction-related legal action on the rise, said
Lani Drody, senior vice president of Lowell Homes in Miami and a member of the Builders Association of South Florida's executive council.
With fewer insurers paying for mold damage, the burden "falls on the shoulders
of contractors and they're saying, 'Give us time to fix the problem,'" she said.
The proposed law broadly describes contractors as anyone who designs, develops, constructs,
manufactures, sells or remodels single- and multifamily homes, including common areas maintained by a condominium association.
Defects can range from deficiencies in design and surveys, to substandard workmanship.
The bill provides a timetable for homeowners and contractors to follow. A homeowner
must notify the contractor in writing about a defect at least 60 days before filing a lawsuit, and within 15 days after finding the problem.
Within five days of receiving the notice, the contractor can inspect and perform "destructive
testing" for the alleged defect. Within 25 days of notice, the contractor must offer either a remedy at no cost to the homeowner or
a financial settlement, or refuse to repair or settle.
The bill's language has raised questions among trial and condominium association lawyers.
Does the homeowners' 15-day window to notify a contractor violate due process rights? Is it enough time, or will it leave people out? Will
Realtors be allowed to inspect for defects?
"We advocate due process and don't want to exclude anyone," said Walter Carson,
government affairs associate in Broward and Monroe counties for the Builders Association of South Florida.
"On the other hand, we want rapid notification so it [the problem] can be remediated.
If you don't … and you have a construction defect in a mold issue, you can take something that could be remediated for $100 and delay
it for 30 days … and turn it into a $100,000 problem."
Condominium lawyers at Hollywood-based Becker & Poliakoff challenged a section of
the bill that would require association attorneys to ask each unit owner - including a developer that owns unsold units - for approval to
file a claim.
Becker & Poliakoff attorney Steven Lesser questioned whether developers would approve
legal action against themselves. And, he noted, state condominium law provides that association attorneys represent the boards, not individual
unit owners. The section was removed from the bill.
Lesser's concern is that those requirements will reappear when the bill is voted on.
Weston attorney Roy Oppenheim, who represents developers, builders and homeowners, predicts
the bill could spawn a cottage industry of prescreeners who will attempt to shepherd the inspection process.
Will that include Realtors? Gene Adams, lobbyist for the Florida Association of Realtors
in Orlando, said his "plain reading of the bill" indicates salespeople could inspect for defects. Real estate salespeople, who
often market homes for builders, are identified as contractors in the bill, he said.
As Buck put it, "This is a fluid situation we have here."
Terry Sheridan can be reached at tsheridan@floridabiz.com
or at (954) 468-2614.
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