Homeowners’ Associations and Home Builders Have to Agree!

by Isaac Benmergui, Esq on November 19, 2013

That’s sort of run-of-the-mill, I guess, as when it comes to law, you are held accountable for what you claim. In this case, when the Bay at Cypress Creek Homeowners’ Association (HOA) filed an action against the Pulte Home Corporation for alleged building code violations under the Florida Statute §553.84, they were undoubtedly going to face what was called a “motion to compel arbitration.” In this original case, though, the motion was denied.real estate law-2

However, Pulte Home Corporation decided to renew its motion in light of additional arguments presented. It was a tough call, faced with some heavy opposition, as the HOA took all measures to ensure the best possible chance of the motion not going through this time around. The association even amended its original complaint about building code violations to be solely based on a statutory violation versus a breach of warranty.

Since Pulte was going to push hard on it, the HOA tried to go a different angle, stating that it could not be compelled to arbitrate anything with regard to a statutory claim. The Second District court, though, had reservations with that, stating that agreements for arbitration apply not only to breaches of warranty, but statutory claims as well. Furthermore, when the HOA stipulated that the arbitration agreement didn’t apply to subsequent property purchasers, the Second District made a common-sense decision. They stated that although they were property buyers after the arbitration agreement was drafted, because they assumed Pulte’s limited warranty policy in favor of the original purchasers of the property, they became “third-party beneficiaries” and therefore could be compelled to arbitrate.

Needless to say, the Pulte Home Corporation succeeded. And the Second District successfully reversed the order under review. It seems that legal agreements make more sense than legal consequences.

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