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Florida homeowners association prevails in construction defects suit

A Florida homeowners association recently prevailed in an important legal battle over serious problems plaguing a 24-unit townhouse development. A federal court rejected an argument made by an insurance company that construction defects in the Jacksonville townhouse development are not covered because the flaws were found after completion of the development.

The ruling in favor of the Biscayne Bay Homeowners Association Inc. of Jacksonville is a big step forward in the group’s effort to get resolution of construction defects that include major parts of the townhouses, including roofs, foundations, exterior walls, soils, concrete and waterproofing, among others, according to a news report.

The report in the legal journal Florida Record states that the dispute started in May of 2016, when the homeowners association filed a construction defects lawsuit against home builder CalAtlantic (now CalAtlantic/Lennar Homes), subcontractor Environmental House Wrap Inc., and more than two dozen other defendants.

More than a year later, Auto-Owners Insurance Company argued that it was “not obligated” to defend CalAtlantic and Environmental.

The homeowners association settled their claims against CalAtlantic in April of this year, which left the litigation between the association and the insurance provider. Auto-Owners argues that the homebuilder is asking for coverage for construction defects "after the work at the project was completed and after the project was put to its intended use." That means, the insurer says, that coverage is barred under the policy’s "completed operations exclusion."

The judge in the case ruled that the exclusion did not apply and then denied the insurer’s motion for summary judgment.

Homeowners associations contending with similar issues should speak with attorneys experienced in construction defect litigation that protects client interests, property and rights.

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