“To Sue or Not to Sue: Considerations for Homeowners Weighing a Construction Defect Lawsuit” – CAI Central Florida Times

For homeowners associations in Florida, construction defects are more than just an inconvenience—they can threaten property values, create unsafe living conditions, and impose significant financial burdens on homeowners. When defects arise due to faulty construction, poor workmanship, or code violations, the Association must decide how to address these issues. In many cases, legal action may be the best or only viable path forward.

However, Florida law typically requires a homeowner vote before an Association can pursue litigation for amounts in excess of $100,000, which threshold amount is usually exceeded in a typical community-wide construction defect matter. This means individual homeowners must weigh the pros and cons of pursuing legal action. While some may worry about short-term marketability or legal costs, the reality is that failing to take action can lead to far greater financial and structural problems down the line.

Before voting, homeowners should carefully consider the long-term benefits of litigation and the risks of inaction. In most cases, pursuing legal action is not just a reasonable option—it’s the responsible choice.

1. Protecting Property Values

One of the primary concerns for any homeowner is the value of their investment. Construction defects—whether they involve water intrusion, structural weaknesses, or code violations—can significantly diminish property values if left unaddressed. Even if the defects are not immediately visible, they can lead to long-term deterioration, making units or common areas less desirable and more expensive to maintain.

Consider the alternatives:

• If defects are ignored, future buyers will be hesitant to purchase in a community with known structural issues.
• Lenders may be unwilling to approve mortgages for properties with significant unresolved defects.
• The cost of repairs may eventually fall entirely on homeowners if legal action is not pursued.

Taking legal action sends a strong message that the Association is proactive in preserving property values and ensuring the community remains desirable for years to come.

2. What If I Want to Sell My Home?

A common concern among homeowners is whether pending litigation will make it harder to sell their homes. While it is true that some buyers and lenders are wary of communities involved in lawsuits, the bigger concern is usually whether the underlying defects will be addressed.

Ask yourself:

• Would a buyer prefer a home in a community actively fixing construction defects or one ignoring them?
• Would I personally buy a home knowing the Association refused to take legal action to fix major problems?

In many cases, buyers recognize that an ongoing lawsuit demonstrates responsible governance. Once litigation is resolved and repairs are completed, property values often stabilize or increase. Moreover, many lenders are still willing to finance properties in communities with pending litigation if they see that the Association is actively working toward a resolution rather than ignoring the issues.

3. Who Should Pay—Homeowners or the Responsible Parties?

If homeowners vote against litigation, they must be prepared to fund repairs themselves. Without legal action, the only sources of funding available to the Association are:

• Reserve funds(which may be insufficient or earmarked for other expenses)
• Special assessments(which can be costly and burdensome for homeowners)
• Loans(which add long-term financial obligations to the community)

Why should homeowners bear the financial burden of repairing defects they did not create? Litigation provides an opportunity to recover the funds necessary to make critical repairs without relying solely on the pockets of homeowners. If the lawsuit is successful, responsible parties—such as developers and contractors—will be held accountable, reducing or even eliminating the need for special assessments or Association loans.

4. Litigation Shows That the Association is Addressing the Problem

A common misconception is that lawsuits create instability in a community. In reality, the opposite is often true—litigation signals that the Association is taking action and protecting the interests of homeowners. When defects are ignored, it raises concerns about deferred maintenance and potential future costs, making buyers and lenders hesitant to engage with the community and creating a sense of uncertainty for existing homeowners.

A well-managed lawsuit can:

• Provide transparency by formally documenting known defects and the Association’s response.
• Ensure the responsible parties, not homeowners, pay for necessary repairs.
• Demonstrate that the Association is fulfilling its fiduciary duty to protect the community.

Ignoring defects, on the other hand, can lead to far greater problems down the road—problems that will eventually require even more money to fix.

5. The Legal and Financial Reality of Litigation

While no lawsuit is guaranteed to succeed, construction defect claims are often strong, especially when backed by expert reports and reasoned legal analysis. Florida law provides clear protections for Associations and homeowners facing construction defects, and experienced attorneys can help navigate the process effectively.

Homeowners should consider:

• Many construction defect attorneys work on contingency, meaning the Association does not pay upfront legal fees.
• Lawsuits can result in substantial recoveries, covering all or most of the repair costs.
• A settlement or judgment may include compensation for temporary repairs, legal fees, and additional damages.

Yes, litigation takes time—but in most cases, the alternative is worse. Deferring action only increases repair costs, and without legal recourse, homeowners may be left with no choice but to pay out of pocket.

6. The Strength of the Case

Before voting, homeowners should be aware of the factors that impact the strength of a lawsuit, including:

• Statute of Limitations:Florida law imposes strict deadlines on construction defect claims. Delaying action can result in homeowners losing their right to seek compensation.
• Engineering Reports:The Association will likely have initial expert reports identifying the defects and their causes, forming the basis for the case.
• Developer/Contractor Solvency:If the responsible parties are still in business and have insurance coverage, the chances of recovery are much higher.

An experienced construction defect attorney will assess these factors and provide guidance on the likelihood of success before homeowners vote.

7. Insurance Coverage as a Potential Recovery Source

Another important consideration is whether the Association or the responsible parties have insurance that may cover the defects. In many cases, developers and contractors carry policies that can contribute to settlements or judgments. Additionally, some Association insurance policies may provide coverage for certain defects.

Before ruling out litigation, homeowners should ensure they fully understand whether insurance could play a role in funding repairs. Legal action is often the only way to compel insurers to pay.

Why Homeowners Vote in Favor of Litigation

For many homeowners, the decision to vote in favor of litigation is not just about seeking financial compensation—it’s about protecting their homes, their investments, and their community’s future. While litigation may sound scary at first, the long-term benefits very often outweigh the risks.

By pursuing legal action, homeowners can:

• Ensure necessary repairs are completed without solely relying on homeowner contributions.
• Hold developers and contractors accountable for defective construction.
• Maintain and even enhance property values by addressing defects proactively.

The alternative—doing nothing—can be far worse. Without legal action, homeowners may be forced to pay out of pocket for repairs, watch their property values decline, and struggle to sell in a deteriorating community.

When weighing the decision, homeowners should ask themselves: If not litigation, then what? In most cases, there are no better alternatives. Voting in favor of litigation is not just a reasonable choice—it is often the best and most financially responsible path forward.

To read the original CAI Central Florida Times article, please click here.

Jake Herrel is an attorney in Becker’s Business Litigation and Construction Law & Litigation practices in the Orlando office. He represents and guides clients through all stages of litigation from the inception of suit through trial, including drafting pleadings and motions, performing discovery, taking and defending depositions, arguing motions, negotiating settlement agreements, and conducting extensive research and analysis on complex procedural and substantive legal issues. Mr. Herrel specializes in serving as a strategic advisor and problem solver in decisive moments for his clients.