Florida Condo & HOA Legal Blog : Florida Condo Lawyer & Attorney : Becker & Poliakoff Law Firm : Condominium & HOA Law Blog

TheU.S. Consumer Product Safety Commission (CPSC) and the U.S. Department of Housing and Urban Development (HUD) released a Chinese drywall protocols update on March 18, announcing that tests show no electrical safety hazards from wiring that has turned black due to sulfur emissions from Chinese drywall.  Removal and replacement of all wiring adds another layer of expense to homeowners plagued with the defective drywall.

With these changes, the remediation guidance for homes with problem drywall calls for the replacement of all:

1. problem drywall;
2. fire safety alarm devices, including smoke and carbon monoxide alarms;
3. electrical distribution components, including receptacles, switches and circuit breakers; and
4. gas service piping and fire suppression sprinkler systems.

 Homeowners that incurred expenses associated with Chinese drywall are entitled to tax relief.  Revenue Procedure 2010-36 allows homeowners to treat damages from corrosive drywall as a casualty loss.  In short these revenue procedures allow homeowners to:
 

• Treat the costs associated with repairing damage to their home or household appliances as a casualty loss.  
• File an amended return and claim the deduction if repairs were made prior to implementation of these procedures (generally up to 3 years).
• Claim up to 75 percent of the unreimbursed amounts in the event they were lucky enough to receive insurance proceeds or actually collected money as a result of a construction defect lawsuit.

 The CPSC encourages community leaders and homeowners to report  claims of defective drywall.  It has received close to 4,000 reports thus far with a large percentage from Florida.   To report drywall incidents or other defective products go to SaferProducts.gov. 

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 Concern for Florida's Consumers Important in Decision to Veto SB 2044 (Property Insurance) and SB 1964 (Design Professional Liability).

Governor Crist vetoed SB 2044, despite support from the Florida Insurance Commissioner and other industry representatives.  The Governor expressed his concerns that increases in insurance premiums and changes to mitigation discounts would be especially hard on Florida's consumers during "these very difficult economic times".

Consumer protection was likewise a major factor with respect to the veto of SB 1964.  Governor Crist agreed with critics of the bill who argued design professionals are not entitled to avoid liability, effectively "removing a consumer's right to bring a tort action against them for economic damages caused by their negligence".  Shifting the burden of economic loss to consumers without sufficient alternative remedies was not acceptable to the Governor.

On the other hand, HB 965, relating to real property assessments, received the Governor's approval.  Owners of properties affected by Chinese drywall may be entitled to a downward adjustment of the assessed value of the property for tax purposes.   Contact your local Property Appraiser to request re-valuation - you may be entitled to a significant discount.

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Today’s Fort Myers News-Press has an article about a new bill proposed by state Representative Gary Aubuchon.  The proposed bill will further regulate what steps owners must take to pursue claims for construction defects.

Florida already has Chapter 558 which is, per its own terms, an “alternative method to resolve construction disputes that would reduce the need for litigation as well as protect the rights of property owners.” Chapter 558, governs all properties which may be the subject of a construction defect claim: single family homes, condominium units, condominium associations and commercial properties. Over the last several years there have been changes to the statute. Representative Aubuchon’s bill appears to have more changes in store for Chapter 558.

As of this post I have not seen a copy of the bill, but based upon the article the bill provides:

            1. Requirements for the exchange of specific material for the claimed defects

            2. Deadline for the exchange of information, and attendant penalties

            3. Changes language about testing for defects

            4. Authorizes parties to agree to mediation

Section 558.004(15) creates a right for parties to demand “discoverable evidence relating to the construction defects” but failed to specify a time frame within which such materials should be provided. The section also references that penalties can be imposed by a court without specifying what the penalties are. However, any penalties for the failure to provide documents, or “discoverable evidence,” impede on the court’s rule-making authority. The courts determine the scope of discovery, as well as what is, and is not, evidence. There are significant issues of constitutionality raised here.

The language about testing for defects will be very important. As the law stands now, a contractor can already request to destructively test an allegedly defective building component subject to the statute’s restrictions.  What more or less will be required under the proposal?

Finally, parties in a civil dispute (whether in suit or not) have always had the opportunity to agree to mediation. You do not need a statute to agree to it.. Although it is unclear if such mediation would be made mandatory prior to filing suit. If so,  this would just be one more impediment to owners being able to pursue their claims and a further hoop to jump through for owners. It would take away from owners the right to gauge for themselves if mediation would be beneficial.

Stay tuned for further updates.

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