The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/CS/CS/SB 966
INTRODUCER: Rules Committee; Commerce and Tourism Committee; Banking and Insurance
Committee; and Senator Burgess
SUBJECT: Home Warranty Transfers
DATE: February 28, 2024 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Moody Knudson BI Fav/CS
2. Renner McKay CM Fav/CS
3. Moody Twogood RC Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/CS/SB 966 requires a builder to warrant a newly constructed home for defects of
equipment, material, or workmanship furnished by the builder or any subcontractor or supplier
resulting in noncompliance with standards of quality measured by acceptable trade practices for
one year from the date of the original conveyance or full completion of each of any items
completed after conveyance of title. The builder must comply with the warranty requirements for
the entire year even if the newly constructed home is sold or transferred. The builder must
remedy, at the builder’s expense, any such defects and store any work damaged in fulfilling the
warranty. A builder may purchase a warranty from a home warranty association to cover the
warranties required in the bill.
The bill specifies that a builder’s warranty is not required to cover normal wear and tear, normal
house settling, substantial modifications by a purchaser, or damage to the newly constructed
home caused by specified persons or an act of God. A builder may provide a warranty that is
broader in scope or that is longer than the required warranty if the warranty explicitly states
certain information. The bill limits enforcement to a private civil cause of action by a purchaser
against a builder for failing to comply with the statutory requirement.
This bill provides an effective date of July 1, 2024.
BILL: CS/CS/CS/SB 966 Page 2
II. Present Situation:
Background
A warranty agreement is a contract that may be given by a builder or purchased by a builder
from a home warranty association. In Florida, home warranty associations are regulated by the
Office of Insurance Regulation (OIR)1 and must maintain certain minimum financial standards to
do business.2
Home Warranties
A home warranty is a contract or agreement between the homeowner and the issuing company,
safeguarding the homeowner from expenses related to the repair or replacement of structural
components or appliances in the home.3 This protection extends to issues caused by normal wear
and tear or defects in these components or appliances.4 A home warranty agreement is tied to the
owner selling the home and does not transfer to the person buying the home unless the home
seller transfers it to the new owner.5 A warranty means that a manufacturer or seller will replace
or repair the product under certain instances.6
Home warranty contracts or agreements can be drafted by a home warranty association7 licensed
under s. 634.303, F.S., or by an authorized insurance company permitted to offer coverage in this
category.8
Builder Warranties
A builder warranty, like a home warranty, is a contractual agreement between the builder and the
homeowner, shielding the homeowner from expenses related to the repair or replacement of
structural components in the home.9
Despite these similarities, there are distinctions in their coverage.10 While a home warranty
typically covers household appliances and systems, such as refrigerators and heating/cooling
systems, and is commonly associated with residential real estate transactions, a builder
warranty—also referred to as a structural warranty—is specifically provided by a builder to a
homebuyer.11 The purpose of the builder warranty is to safeguard the homebuyer against
significant structural defects in workmanship and materials used during the construction of the
new home by the builder.12
1 Section 634.302, F.S.
2 Section 634.305, F.S.
3
Section 634.301(2), F.S.
4
Id.
5
Section 634.312(1), F.S.
6
45 Fla. Jur 2d Sales and Exchanges of Goods § 156.
7
Section 634.301(3), F.S., defines “home warranty association” as any corporation or any other organization, other than an
authorized insurer, issuing home warranties.
8
Section 634.303, F.S.
9
Section 634.301(2), F.S.
10
Quality Builders Warranty, What is a Structural Warranty?, available at: https://qbwc.com/blog-news/what-is-a-structural-
warranty/ (last visited Feb. 5, 2024).
11
Id.
12
Id.
BILL: CS/CS/CS/SB 966 Page 3
HUD warranties
The United States Department of Housing and Urban Development (“HUD”) includes the
Federal Housing Administration and is the federal regulatory agency responsible for the
oversight of housing in the United States.13 HUD requires a builder to provide a warranty for a
dwelling designed for not more than a four-family residence which is approved for mortgage
insurance by HUD.14 The builder must warrant for one year from the date of the original
conveyance of title or initial occupancy of the dwelling, whichever occurs first, that the dwelling
is constructed in substantial conformity with the plans and specification.15
Manufactured Homes Regulation
Federal law regulates the construction and safety standards of manufactured homes.16
Manufacturers of manufactured homes must certify that such home conforms to all applicable
Federal construction and safety standards.17 A manufacturer must notify the first purchaser,
registered owner, and retailer of a defect that relates to construction or safety standards, or which
constitutes an imminent safety hazard to the purchaser, within a reasonable time after
discovering such defect.18 If the Secretary of HUD or a court of appropriate jurisdiction finds,
prior to the sale by a distributor or retailer to a purchaser, that a manufactured home does not
conform with the construction or safety standards or contains a defect which constitutes an
imminent safety hazard, the manufacturer is required to: (a) repurchase the manufactured home
and reimburse certain costs, (b) at the manufacturer’s expense, immediately furnish the
distributor or retailer with the required conforming part or parts or equipment for installation, or
(c) reimburse the distributor or retailer for the installation.19 If a manufacturer fails to comply
with these requirements, a distributor or retailer may bring an action seeking a court injunction
compelling compliance.20
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act (MMWA)21 is a federal law that governs consumer product
warranties. Passed in 1975, the MMWA requires manufacturers and sellers of consumer products
to provide consumers with detailed information about warranty coverage before and after the
sale of the warranted product.22
The MMWA defines three kinds of consumers:
13
The HUD, Office of Housing, available at: Housing | HUD.gov / U.S. Department of Housing and Urban Development
(HUD) (last visited Feb. 26, 2024).
14
12 U.S.C. §1701j-1(a).
15
Id.
16
42 U.S.C. §5403.
17
42 U.S.C. §5415.
18
42 U.S.C. §5414.
19
42 US.C. §5412(a).
20
42 U.S.C. §5412(b).
21
15 U.S.C. §§ 2301-2312 (1975).
22
MMWA does not apply if a seller or manufacturer does not provide a warranty on their product. Jason Gordon, Magnuson
Moss Warranty Act – Explained, The Business Professor, Sept. 26, 2021, available at:
https://thebusinessprofessor.com/en_US/consumer-law/magnuson-moss-warranty-act (last visited Feb. 5, 2024).
BILL: CS/CS/CS/SB 966 Page 4
A buyer of any consumer product;
Any person to whom such product is transferred during the duration of an implied or express
warranty applicable to the product; and
Any other person who is entitled by the terms of such warranty or under applicable state law
to enforce the obligations of the warranty.23
Home and Builder Warranties
The elective market in Florida allows a builder, seller, buyer, or owner of a home to choose
whether they would like to purchase a home warranty to cover against the cost of repair or
replacement, or furnishes repair or replacement, of any structural component or appliance of a
home, caused by wear and tear or a defect of a structural component or appliance.24
Warranty associations and companies in Florida, including those associations selling home and
service warranties, and those companies selling motor vehicle service agreements, are regulated
by the OIR.25 OIR regulates the insurance industry in Florida. OIR is responsible for the
regulation of all activities in the state concerning insurers and other risk bearing entities,
including licensing, rates, policy forms, market conduct, claims, issuance of certificates of
authority, solvency, viatical settlements, premium financing, and administrative supervision.26
While warranties are not considered traditional insurance products, OIR regulates warranty
associations and companies similarly to the way in which it regulates insurers.27 Home and
service warranty associations must be licensed by OIR28 and must maintain certain minimum
financial standards in order to do warranty business in Florida.29
The following chart reflects the number of licensed warranty associations in Florida as of
January 23, 2024:30
23
15 U.S.C. § 2301(3) of MMWA; O'Connor v. BMW of N. Am., LLC, 905 So. 2d 235, 236–37 (Fla. 2d DCA 2005); see
also, § 2310(d) of MMWA provides that, “a consumer who is damaged by the failure of a supplier, warrantor, or service
contractor to comply with any obligation under this title, or under a written warranty, implied warranty, or service contract,
may bring suit for damages…”
24
Section 634.301(2), F.S.
25
See ch. 634, F.S.
26
Florida Office of Insurance Regulation, Organization and Operation, available at: https://floir.com/about-us/organization-
and-
operation#:~:text=The%20Florida%20Office%20of%20Insurance,settlements%2C%20premium%20financing%2C%20and
%20administrative (last visited Feb. 5, 2024). See also s. 624.308, F.S., and R. 69O, et seq., F.A.C.
27
See ch. 634, F.S.
28
Sections 634.303 and 634.403, F.S. Neither the Florida Insurance Code nor this section grants permission for any home
warranty association to conduct insurance business beyond what is specifically defined as home warranty or to participate in
any other form of insurance. Any engagement in alternative insurance types requires explicit authorization through a
certificate of authority issued by the office under the provisions of the Florida Insurance Code. Section 634.325, F.S.
29
Sections 634.3077 and 634.406, F.S.
30
Data retrieved from OIR Active Company Search application, available at: https://floir.com/CompanySearch/index.aspx
(last visited Jan. 23, 2024).
BILL: CS/CS/CS/SB 966 Page 5
Type of Number of
Association/Company Licensees
Home Warranty 46
Association
Service Warranty 102
Association
Motor Vehicle Warranty 119
Company
Total 267
Home warranty providers must ensure that every home warranty is sent or delivered to the
warranty holder within 45 days after the commencement of coverage, subject to the insurer's or
home warranty association's premium payment requirements.31 Furthermore, all home warranty
contracts are transferable.32 The contract should explicitly inform the purchaser of their right to
assign it within 15 days of selling or transferring the home. The home warranty company may
charge an assignment fee not exceeding $40.33 The home warranty may be assigned, as well
from a home builder, who initially purchased the warranty, to subsequent home purchasers.34
Currently, several companies offer warranties covering structural components of a home in
Florida; however, Florida law does not regulate these warranties. Below are companies that
provide builder warranties:35
Manufacturer Coverage Offered
America’s Preferred Structural 1-year coverage on workmanship
Warranty 1 or 2-year coverage on home systems
10-year coverage on structural defects
2-10 HBW 1-year coverage for workmanship
2-year coverage for distribution systems
10-year coverage for qualifying structural defects
on newly built homes
31
Section 634.312(2), F.S.
32
Section 634.312(1), F.S.
33
Id.
34
Id. Certain exemptions in the home warranty association statute cover cases where builders or appliance sellers offer
standard guarantees without extra charges, exclude service contracts with non-profits handling repairs, and accept contracts
aligning with Florida's Insurance Code for systems and appliances, excluding structural components. Individuals affiliated
with a domestic insurer are exempt if they avoid offering home warranties to Florida residents, but compliance requires the
insurer to directly issue warranties or provide a specific policy. Non-compliance, as determined by the Office of Insurance
Regulation, subjects the person to home warranty association regulations. Additionally, the regulations do not apply to
programs offering warranties on new homes if supported by an insurance policy from a licensed Florida insurer, contingent
on approval by the Office. Sections 634.301(2) and 634.327, F.S.
35
America’s Preferred Structural Warranty, Coverage, available at: https://www.apsw.com/ (last visited Feb. 5, 2024). 2-10
HBW, Structural Warranties, available at: https://www.2-10.com/builders-warranty/structural-warranties/ (last visited Feb. 5,
2024). Residential Warranty Company, Structural Warranties vs Extended Warranties – What’s the Difference?, available at:
https://www.rwcwarranty.com/homeowners-2/structural-warranties-vs-extended-warranties/ (last visited Feb. 5, 2024).
BILL: CS/CS/CS/SB 966 Page 6
Residential Warranty 1-year coverage for workmanship
Company 7-year coverage for qualifying structural defects
10-year coverage for qualifying structural defects
III. Effect of Proposed Changes:
Section 1 creates s. 553.837, F.S., to require a builder to warrant a newly constructed home for
all construction flaws caused by defects of equipment, material, or workmanship furnished by
the builder or any subcontractor or supplier resulting in the noncompliance with standards of
quality as measured by acceptable trade practices for a period of one year from the date of
original conveyance of title to the initial purchaser or from the date of full completion of each of
any items completed after conveyance of title. The builder must comply with the warranty
requirements for the duration of the warranty even if the newly constructed home is sold or
transferred and is no longer owned by the initial purchaser. The builder must remedy, at the
builder’s expense, any such defects and must restore any work damaged in fulfilling the terms
and conditions of the warranty. A builder may purchase a warranty from a home warranty
association provided for under ch. 634, F.S., to cover the warranties required under the bill.
The bill specifies that the required warranty need not provide coverage for:
Normal wear and tear;
Normal house settling within generally acceptable trade practices;
Any object or part of the newly constructed home that has been substantially modified by the
initial or a subsequent purchaser; or
Damage caused by t