Business and Legal Insights

Florida Governor Ron DeSantis recently signed H.B. 623 into law on April 15, 2024, creating a new section 553.837, Florida Statutes, which will require builders to provide a one-year warranty for all newly constructed homes.  While many new construction home builders already offer a warranty, this statute requires that, starting July 1, 2025, all builders of newly constructed homes provide a statutory warranty, unless they already provide a written warranty that meets or exceeds the statutory warranty terms.

Who Does the New Statute Affect?

The new statute applies to the builder of any “newly constructed home,” including residential real property or manufactured building, modular building or factory-built building which is a single-family dwelling, duplex, triplex, or quadplex that has not been previously occupied. The warranty requirement will not apply to remodels, renovations, or commercial construction.  The statute defines the term “builder” as the primary contractor who obtained the building permit, possessed the knowledge, and had the responsibility to control the contracting activities.  Therefore, the statutory warranty will not apply to subcontractor trades, but only to the builder that obtained the overall construction permit and had control of construction activities. 

What are the Required Terms of the New Statutory Warranty?

The new statutory warranty is a period of one year after the date of original conveyance of title to the initial owner or after the date of initial occupancy, whichever comes first, even if the home is sold or transferred and is no longer owned by the initial owner.  The warranty applies even to the subsequent owner during the one-year warranty period.

The new statutory warranty requires the builder to warrant the newly constructed home for all construction defects of equipment, material, or workmanship furnished by the builder or any subcontractor or supplier resulting in a material violation of the Florida Building Code.  The statute borrows the definition of “material violation” from section 553.84, Florida Statutes, which provides that a “material violation” means a Florida Building Code violation that exists within a completed building which may reasonably result, or has resulted, in physical harm to a person or significant damage to the performance of a building or its systems.

The new builder statutory warranty contains exceptions for coverage of defects with respect to appliances or equipment that fall under a manufacturer warranty.  The warranty also does not cover normal wear and tear or normal house settling.  Also excluded from coverage is: (1) any work performed or material supplied as part of any construction work by or on behalf of the initial purchaser or subsequent owner after completion of the newly constructed home not involving the builder; (2) any damage caused by the initial purchaser or subsequent owner; or (3) any damaged caused by any act of God over which the builder has no control, such as a natural disaster or fire caused by lightning.

What Does the Statutory Warranty Require the Builder to Do?

A builder will have to remedy, at their own expense, any defects that are covered by the warranty.  The builder is also required to restore any work damaged in fulfilling the terms and conditions of the warranty.  In lieu of performing the work itself, a builder may purchase a warranty from a home warranty association provided for under Chapter 634, Florida Statutes, to cover the builder’s obligations under the statutory warranty.  If a builder or home warranty association fails to comply with the statutory warranty, the purchaser has a private right of action to bring a suit in court for violation of the warranty.

Builders with current warranties that exceed the standards of the new statutory warranty can rely on the terms of their existing warranty, as the statute only sets a minimum requirement for coverage, length, and transferability.  This means that builders can set their own warranty terms as long as the warranty lasts for at least one year, transfers to new owner(s) within the first year, and covers all construction defects of equipment, material, or workmanship furnished by the builder or any subcontractor or supplier.  If the builder chooses to provide a warranty longer than the one-year period required by the new statutory warranty, the builder’s written warranty must state that it is longer than the statutory warranty, and state whether the warranty is transferrable for a duration beyond one year and the terms under which the warranty may be transferred.

When Does the New Statutory Warranty Go Into Effect?

Builders of newly constructed homes will be subject to the statutory warranty when the statute become effective on July 1, 2025.  Builders of newly constructed homes should prepare for the new statute by reviewing in advance the terms of their warranties to ensure they meet or exceed the statutory requirements.

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