The Port Marina Condominium Association, Inc. v. Roof Services, Inc., 4D12-3693 (Fla. 4th DCA 2013):
The Florida Condominium Act provides for a warranty of fitness and merchantability as to work provided by contractors and materials provided by suppliers for condo developments, but not as to the manufacture of construction materials. Port Marina filed a complaint, seeking relief from GAF Materials Corporation under Florida’s Condominium Act. The trial court dismissed Port Marina’s complaint against GAF for failure to sufficiently allege that GAF was a supplier.
Florida Statute section 718.503(1)(a)1. states, in relevant part, that a contract for the sale of a residential unit must:
Contain the following legend in conspicuous type: … THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER’S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE BUYER.
An often litigated issue in rescission of pre-construction condominium purchase agreements is whether the amendment made by the developer is one that is “material” and “adverse”.
In a 2011 opinion, the Fourth District Court of Appeal reversed a trial court dismissing a complaint seeking to rescind several pre-construction condominium purchase agreements. Scarfone v. P.C.-Plantation, LLLP, 59 So. 3d 371 (Fla. 4th DCA 2011). In Scarfone, the developers offered condominium units for sale, and entered into pre-construction purchase agreements with the purchasers. Subsequently, the purchasers learned that the condominium subdivision had been developed into a “luxury rental community”. The purchasers did not receive notice of this change, and accordingly filed a complaint seeking to receive a return of their deposits. The developer filed a motion to dismiss the complaint arguing that it reserved the right to lease the units in the purchase agreement; the trial court agreed with the developer, and granted the motion.
The Fourth District Court of Appeal reversed, noting that a change to an offering is material where a reasonable buyer would find the change so significant that it would alter the buyer’s decision to enter into the contract. The court held that while the developer may have reserved the right to lease some units, “a full scale conversion” of the development into a “luxury rental community” may constitute a change to such a degree that it would frustrate a buyer’s reasonable expectations as to the material nature of the offering and alter their decision to enter the agreement. Since this created an issue of fact that could not be appropriately determined on a motion to dismiss, the order dismissing the complaint was reversed.
If you are a pre-construction condominium purchaser seeking advice on your rescission rights under the Florida Condominium Act, call one of our experienced attorneys today at 954-779-7009.