Last week, the Florida Supreme Court held in Maronda Homes, Inc. v. Lakeview Reserve Homeowners Assoc., Nos. SC10-2292 & 2336, that the implied warranty of habitability covers various infrastructure defects in residential subdivisions.  The decision is important for home warranty providers, for a number of reasons.

First, many home warranty providers offer workmanship warranties covering defects in site work (like defective grading and drainage) on new homes.  The Florida Supreme Court’s decision may make such coverage duplicative.  At a minimum, home warranty providers should analyze the language they use to market plans in Florida, to ensure the continued accuracy of their representations regarding the responsibilities of homeowners.

Second, given that this decision comes from the highest court in Florida, the case may signify a broader shift toward imposing liability for defects in construction on home builders, instead of homeowners.  If the decision is reflective of such a trend, this obviously would have significant implications for sellers of home warranties that seek to insure against damage resulting from construction defects.