Tuesday, April 24, 2018
Business

Homeowners want Gov. Rick Scott to veto bill that forces them to pay neighborhood repairs

TALLAHASSEE — By passing a bill that could hit some consumers' pocketbooks and potentially run afoul of the state's Constitution, the Florida Legislature has aroused a sleeping giant: Florida's fed-up homeowners associations.

In recent days, Gov. Rick Scott has received a digital flood of more than 1,000 emails opposing HB 1013, which would codify that homeowners are not entitled to an "implied warranty" for amenities outside their homes — such as driveways and screened enclosures and the like. Many of the emails came from homeowners associations who are worried about being held liable for damaged roads and drainage systems that they own. They have amassed an organized campaign to keep the controversial law off the books.

Scott received the bill last week, and has one more week to decide whether to sign it.

Sponsored by Rep. Frank Artiles, R-Miami, the bill stems from an ongoing court case in which a Central Florida homeowners' association is suing a developer for the neighborhood's poorly built drainage pipes and pothole-ridden roads.

The case is before the Florida Supreme Court, and the homeowners are trying to recover more than $600,000 for repairs. The decision is expected to have a major impact on homeowners, developers and neighborhood associations.

It centers on the concept of "implied warranty," which protects homeowners who buy a property and later find out that it was poorly constructed. Lower courts disagreed about whether that warranty extends beyond the four walls of a structure to include things like driveways, and the court is set to make a landmark, precedent-setting decision soon.

But before the court could make the potentially groundbreaking ruling, the Legislature stepped in with HB 1013, which clearly states that implied warranty does not apply to "offsite improvements."

Artiles, the Miami lawmaker, claimed his bill — which passed with bipartisan support — was a response to "activist judges," and would prevent trial lawyers from exploiting home builders.

"They want to obscure the law to have developers be on the hook for offsite improvements," he said, adding that 40 years of case law support his position. "This bill doesn't take away any rights of the consumer."

Homeowners groups disagree, and state analysts warned that trumping an active Supreme Court case could be unconstitutional.

Lisa Magill, an attorney with Becker & Poliakoff, called it an issue of "fundamental fairness," stating that developers should be held liable if they build defective roads, drainage pipes or street lights.

"You can't live in your home if the drainage pipes are broken because it's going to be flooded all the time," she said. "How can you expect people to buy what may be the most significant investment of their entire lives and have no way for them to seek redress?"

The group is arguing that the bill is anti-consumer and will harm the state's fragile housing market, by shifting repair costs to homeowners. Many of the state's homeowners are severely underwater on their mortgages and additional repair costs could force them into voluntary foreclosure, Magill said.

The 1,054 emails against the bill make it one of the most vehemently opposed measures to pass the Legislature this year. There were also 276 emails expressing support.

Patrick Howell, who is representing homeowners in the Supreme Court case, said that the bill could force each family to pay an $1,800 special assessment to fix the neighborhood's broken roads.

"This is a very middle-class neighborhood," he said. "We've had yards that have had sinkholes; we have roads that have collapsed."

Community associations have struggled mightily during Florida' foreclosure crisis as more and more homeowners fail to pay their monthly maintenance dues. Several communities have not been able to make necessary repairs.

But builders are struggling as well, as they face the sixth year of the housing bust. Additional liabilities for repairs of offsite amenities could greatly increase building costs, Artiles said.

Job numbers released Friday show Florida's construction industry lost 13,500 jobs in the last year, even as overall job creation has improved.

"The construction industry has had twice the unemployment that the state averages," said Rick Watson, of Associated Builders & Contractors of Florida. "The bill is establishing what the law has been — we're not taking anything away from the homeowners."

Toluse Olorunnipa can be reached at [email protected] and on Twitter @ToluseO

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