CONSIDER THE LIMITED WARRANTY FROM YOUR HOMEBUILDER

Posted on June 14, 2026June 14, 2026 by David Adelstein

When purchasing a home from a homebuilder, there is an important consideration when it comes to the limited warranty you receive around the time you close on the home. That limited warranty likely includes an arbitration provision requiring you to arbitrate your disputes, such as construction defect claims, against the homebuilder. That arbitration provision will most likely include all claims, including statutory claims (such as a statutory violation of a building code claim), requiring you to arbitrate, as opposed to litigate, your disputes against the homebuilder. This is an important consideration. If the arbitration provision does not allow you to arbitrate all of your claims, and eliminates your rights to legitimate statutory claims, the arbitration provision could be unenforceable.

By way of example, in a residential construction defect dispute, Anderson v. Taylor Morrison of Florida, Inc., 223 So.3d 1088 (Fla. 2d DCA 2017), the appeal turned on whether the arbitration provision in the homebuilder’s limited warranty was valid. The homeowners took possession of their home in 2009. In 2015, the homeowners served a Florida Statutes Chapter 558 notice of construction defects that included a statutory violation of a building code claim under Florida Statute §553.84. The limited warranty included an arbitration provision that specified it was the “exclusive remedy” for all disputes arising out of or related to the warranty or issues with the home and property. When read together with the warranty’s disclaimer that precluded claims not covered by the warranty “whether in contract, tort, or otherwise,” the statutory building code violation claim could not be remedied through arbitration because it fell outside the warranty’s coverage.

The homeowners sued the homebuilder for construction defects that included the statutory violation of building code claim. The homebuilder moved to compel arbitration under the limited warranty. The homeowners argued the arbitration provision was void against public policy because it barred recovery of all statutory and contractual claims.

The appellate court held that because the arbitration provision limited the homeowners to warranty claims but barred their statutory claim, it violated public policy and was unenforceable. The arbitration provision did not merely diminish the homeowner’s statutory remedy for a building code violation but eliminated it by confining them to warranty claims subject to arbitration. In this case, the homeowners were therefore free to litigate their building code violation claim due the unenforceability of the arbitration provision.

However, since this case, most homebuilders have modified their warranties such that all claims, including statutory claims, are subject to arbitration with disclaiming language in the limited warranties that must be considered.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

FLOWING DOWN LIABILITY IN CONSTRUCTION DEFECT LAWSUITS

Posted on September 17, 2016November 8, 2024 by Edward Garber

In construction defect lawsuits, third-party (or fourth-party) claims are routine to flow-down liability downstream. Right, a general contractor sued by an owner will want to flow-down its liability to the subcontractors. And, subcontractors will want to flow down their liability to sub-subcontractors and suppliers. Common, and appropriate, flow-down claims are indemnification and contribution claims.

In an appellate opinion with little factual discussion, Gozzo Development, Inc. v. Esker, 2016 WL 2908442 (Fla. 4^th DCA 2016), the trial court entered summary judgment in favor of subcontractors dismissing the contractor’s indemnification and contribution claims. The owner sued the contractor for a violation of building code (and corresponding defects and damage) and the contractor, in turn, sued subcontractors for indemnification and contribution. The contractor was seeking indemnity for the statutory building code violations as well as contractual breaches that caused the construction defects and damage.

On appeal, the Fourth District reversed the trial court’s summary judgment as to the indemnification claim, but affirmed the trial court’s dismissal of the contribution claim (as Florida abolished joint and several liability in negligence-based actions):

Further, as appellant [contractor] sought indemnity for violations of both statutory and non-statutory building standards, it was error to grant summary judgment on the indemnity claim under a provision that applies only to statutory liability. The statutory building code does not preclude liability for violating a contractual duty to adhere to local building standards.

However, we affirm the trial court’s summary judgment on the contribution claim, as appellant’s right to contribution had not arisen by the effective date of the revised statute barring joint and several liability.

Gozzo Development, 2016 WL at *1.

It is important to understand the manner in which liability is flowed downstream (passed-through) in construction defect lawsuits. It is generally this reason why construction defect lawsuits contain many parties, from the general contractor hired by the owner to the subcontractors, sub-subcontractors, and suppliers implicated by the defective work. These articles on indemnification (common law and contractual) and contribution explain these very important flow-down claims in more detail.

DEFERENCE GIVEN TO ARBITRATION PROVISIONS

Posted on August 12, 2013November 8, 2024 by Edward Garber

The recent case of Pulte Home Corp. v. Bay at Cypress Creek Homeowner’s Association, Inc., 38 Fla. L. Weekly D1705a (Fla. 2d DCA 2012) involves a dispute by a homeowner’s association against its developer / homebuilder. In this case, the association sued the developer / homebuilder for building code violations under Florida Statute s. 553.84. The association did this in order to try to circumvent an arbitration provision in the developer / homebuilder’s limited warranty given in favor of initial purchasers. The developer / homebuilder moved to compel arbitration which was denied by the trial court. On appeal, the Second District Court of appeals reversed the trial court finding that statutory claims were covered by the arbitration provision.

The issue to remember is that deference is given to arbitration provisions and that statutory claims, breach of contract claims, warranty claims, and tort claims are all claims that may be submitted to arbitration pursuant to an arbitration provision. In Pulte Home, the association, for strategic reasons, did not want to arbitrate and tried to pursue a claim that did not subject it to arbitration. Although the Second District did not recite the arbitration provision in the opinion, the Court maintained that the agreement to arbitrate in the limited warranty given to initial purchasers covered statutory claims.