Revisiting “Florida’s Billion Dollar Stucco Problem”
Florida is an ideal place to buy real estate. With a wide variety of home types and a lack of new buildings, demand is high for new construction. That demand, just as occurred in the run up to the great recession, puts pressure on home builders to meet tight timeframes to construct and sell housing inventory. Under those circumstances, home builders often cut corners resulting in costly construction defects.
News stories about construction defects have popped up throughout Florida. Commonly, those defects involve home builders improperly applying stucco. Indeed, large-scale stucco failures have been found in developments across Florida. Between 2005 and 2008, homeowners in Tampa Bay reported massive water intrusion problems that resulted in crumbling exterior walls, widespread mold issues and even collapsed balconies. In 2016 a Florida jury awarded a $9.6 million verdict against DR Horton due, in part, to stucco defects. The problem is so pervasive it has earned the moniker of “Florida’s billion-dollar stucco problem.” Florida’s Attorney General is even investigating national home builders for deceptive trade practices related to their denial of meritorious defective stucco warranty claims.
The Costly Dangers of Florida’s Stucco Problem
The majority of homes in Florida are covered in stucco. This convenient and affordable building material is made up of thin layers of cement that are designed to protect homes from moisture. In theory, stucco should last the lifetime of any home that is properly maintained and well cared for. But when it’s applied improperly, the stucco can easily crack and allow water to penetrate into the wood beneath. Damages are often hidden by subtle water intrusion. However, what lies beneath is major property damage caused by cracks through walls and windows. Unfortunately, by the time most homeowners notice any cracks or buckling of the stucco, it’s too late and the damage is done. In some cases, individual stucco issues can cost homeowners upwards of $100,000 in repairs.
What is the Cause of the Problem?
When the stucco problem first started making headlines, it seemed that the issues could be blamed on a quick or thin application, where the stucco thickness was less than 7/8 inch. The majority of the stucco problems that have been reported are linked to 2-story home builds that have masonry on the first floor and a second story that is built from wood. In reality, this billion-dollar problem is a bit more complicated.
There are two basic stucco applications used in Florida. A stucco application consists of using a weather-resistive barrier with a metal lath that is attached to the substrate of the building. Then three coats of masonry stucco cement are applied in a 3/8-inch scratch coat, followed by a 3/8-inch brown coat, and finally a 1/8-inch finish coat. Each coat requires a curing period. Everything from thin application to inadequate drying times can cause the stucco system to prematurely fail. Regular stucco maintenance will not prevent moisture intrusion on homes with improperly applied stucco. In response to the inadequate drying times, Florida updated the building code to clarify longer curing times between each coat of stucco.
What Are Your Legal Rights?
When a construction defect is discovered, the aggrieved party must strictly comply with Florida Statute Chapter 558. Pursuant to these laws, the owner must provide the builder or contractor a notice of claim describing the nature of the alleged defect, the damage or loss as a result of the defect and the location of the defect. Once received, the builder or contractor is required to provide a written response within a specified period of time. The contractor must include one or more offers that are specified in (5)(a)-(e) of Chapter 558 and all information required for the offer and any reports of the scope of inspections on the property. If the parties cannot come to an agreement, the owner or community association can proceed to litigation.
Unfortunately, most defects are latent (i.e., hidden) and not readily apparent to homeowners. Whether the defects are hidden is important because Florida Statute §95.11(3)(c) imposes two time limitations that can bar a homeowner or community association from pursuing damages. First, Florida’s “statute of limitations” bars claims four years after homeowner or community association discovered the defect or should have discovered the defect with the exercise of due diligence. Second, Florida’s “statute of repose” bars claims not filed within ten years of the date of possession by the owner or the date of the issuance of a certificate of occupancy.
Whether claims are barred by the statutes of limitations or repose is a factual determination usually left for a jury to decide. Several factors can extend the time period for bringing claims. For, example, in condominiums the time period does not start until the unit owners elect a majority of the board of directors. Similarly, many courts have ruled that the statute of repose does not begin to run until the last building is completed, which substantially extends the time period of owners within the first phase of homes to pursue claims.
The take away is to not assume your claims are stale even if you are past ten years from issuance of the certificate of occupancy. If you believe your home or community is impacted by construction defects, you should immediately consult legal counsel to determine whether your claims are still viable. Similarly, for community associations who recently transitioned to homeowner control, retaining a team of engineering and legal experts to inspect your buildings for latent defects is critical for the long term health of your building structures.
At AriasBosinger, we are dedicated to helping community associations and property owners fight for their rights when faced with faulty construction. If you are faced with costly repairs and damage stemming from Florida’s stucco problem, now is the time to take action. Contact us online for more information or schedule a consultation with our lawyers today.