Florida Senate - 2024                       CS for CS for SB 966
       
       
        
       By the Committees on Commerce and Tourism; and Banking and
       Insurance; and Senator Burgess
       
       
       
       
       577-02963-24                                           2024966c2
    1                        A bill to be entitled                      
    2         An act relating to home warranty transfers; amending
    3         s. 634.312, F.S.; providing a limitation on the
    4         application of provisions relating to home warranty
    5         contract assignments; amending s. 634.331, F.S.;
    6         making technical changes; conforming provisions to
    7         changes made by the act; creating part IV of ch. 634,
    8         F.S., entitled “Miscellaneous Provisions”; creating s.
    9         634.601, F.S., defining terms; creating s. 634.602,
   10         F.S.; providing requirements for express written
   11         warranties and home warranties transferred to
   12         subsequent home purchasers; providing for the
   13         assignment of maintenance contracts in certain
   14         circumstances; specifying conditions for the automatic
   15         transfer of home warranties that are conditions
   16         included in maintenance contracts; providing
   17         requirements of a subsequent purchaser who accepts the
   18         assignment of a maintenance contract, and of a builder
   19         or home warranty association in such instance;
   20         requiring a builder or home warranty association to
   21         provide certain notice to a subsequent purchaser;
   22         providing that such notification be at a certain
   23         address unless the builder or home warranty
   24         association are notified by the purchaser of a
   25         preferred method; restricting a builder or home
   26         warranty association from limiting the timeframe for
   27         notice by a subsequent purchaser; prohibiting a
   28         builder or home warranty association from charging a
   29         fee for transferring the warranty; providing
   30         construction; renaming ch. 634, F.S.; providing an
   31         effective date.
   32          
   33  Be It Enacted by the Legislature of the State of Florida:
   34  
   35         Section 1. Subsection (1) of section 634.312, Florida
   36  Statutes, is amended to read:
   37         634.312 Forms; required provisions and procedures.—
   38         (1) Except as provided in s. 634.602: All
   39         (a) Home warranty contracts are assignable in a consumer
   40  transaction and must contain a statement informing the purchaser
   41  of the home warranty of her or his right to assign it, at least
   42  within 15 days from the date the home is sold or transferred, to
   43  a subsequent retail purchaser of the home covered by the home
   44  warranty and all conditions on such right of transfer.
   45         (b) The home warranty company may charge an assignment fee
   46  not to exceed $40.
   47         (c) Home warranty assignments include, but are not limited
   48  to, the assignment from a home builder who purchased the home
   49  warranty to a subsequent home purchaser.
   50         Section 2. Section 634.331, Florida Statutes, is amended to
   51  read:
   52         634.331 Coverage of property for sale.—A home warranty may
   53  provide coverage of residential property during the listing
   54  period of such property for a period not to exceed 12 months,
   55  provided that the home warranty company charges the warranty
   56  purchaser a separately identifiable charge for the listing
   57  period coverage in an amount equal to at least 15 percent of the
   58  annual premium charged for the home warranty and the charge for
   59  such coverage is due at the earlier of the end of the listing
   60  period or the date the sale of the residential property is
   61  closed. The requirements in s. 634.602 apply to a home warranty
   62  that is transferred to the home purchaser.
   63         Section 3. Part IV of chapter 634, Florida Statutes,
   64  consisting of sections 634.601 and 634.602, Florida Statutes, is
   65  created to read:
   66  
   67                               PART IV                             
   68                      MISCELLANEOUS PROVISIONS                     
   69  
   70         634.601 Definitions.—As used in this part, the term:
   71         (1) “Builder” means the primary contractor of a home who
   72  possesses the requisite skill, knowledge, and experience, and
   73  has the responsibility, to supervise, direct, manage, and
   74  control the contracting activities of the business organization
   75  with which he or she is connected and who has the responsibility
   76  to supervise, direct, manage, and control the construction work
   77  on a job for which he or she has obtained a building permit.
   78  Construction work includes, but is not limited to, construction
   79  of structural components.
   80         (2) “Home warranty” or “warranty” has the same meaning as
   81  in s. 634.301.
   82         (3) “Home warranty association” has the same meaning as in
   83  s. 634.301.
   84         (4) “Indemnify” means to undertake repair or replacement of
   85  a home’s structural component, or pay compensation for such
   86  repair or replacement by cash, check, or other similar means,
   87  including, but not limited to, electronic means.
   88         (5) “Structural component” means one or more essential
   89  elements of a home, including the roof, foundation, basement,
   90  exterior or interior walls, electrical and plumbing systems,
   91  ceilings, floors, or spray foam. The term includes any item
   92  covered in the terms of a home warranty.
   93         634.602 Structural component indemnification or coverage.—
   94         (1) Except as provided in this section, if a builder is
   95  obligated under and provides a home purchaser an express written
   96  warranty on or after January 1, 2025, that indemnifies a home
   97  purchaser against the cost of repairing the structural
   98  components of a home and such warranty has not become null and
   99  void or lawfully terminated under the terms of the warranty, the
  100  express written warranty and all indemnification rights, terms,
  101  and conditions thereunder shall automatically transfer to any
  102  subsequent purchaser of the home for the duration of the express
  103  written warranty.
  104         (2) Except as provided in this section, if a builder
  105  purchases a home warranty from a licensed home warranty
  106  association on or after January 1, 2025, covering the structural
  107  components of a home and such warranty has not become null and
  108  void or lawfully terminated under the terms of the warranty, the
  109  home warranty and all indemnification rights, terms, and
  110  conditions thereunder shall automatically transfer to any
  111  subsequent purchaser for the duration of the home warranty.
  112         (3) With respect to home maintenance contracts:
  113         (a) A home warranty that is conditioned on the continuation
  114  of a maintenance contract shall automatically transfer to a
  115  subsequent purchaser pursuant to subsections (1) and (2) unless
  116  the subsequent purchaser declines the assignment of the
  117  underlying maintenance contract. If a subsequent purchaser
  118  accepts the assignment of the maintenance contract, the
  119  subsequent purchaser is obligated to comply with the terms and
  120  conditions of the maintenance contract, including, but not
  121  limited to, the payment of consideration. A builder or home
  122  warranty association must provide notice of any amounts due
  123  under the maintenance contract to a subsequent purchaser at the
  124  home address covered by such contract unless the subsequent
  125  purchaser notifies the builder or home warranty association of a
  126  preferred method of notification.
  127         (b) Unless a maintenance contract is a condition of a home
  128  warranty, the home warranty does not automatically transfer to a
  129  subsequent purchaser. Such maintenance contract shall transfer
  130  to a subsequent purchaser only to the extent that the builder or
  131  home warranty association and subsequent purchaser agree to the
  132  assignment of the contract.
  133         (4) A subsequent purchaser who receives the benefit of a
  134  warranty being automatically transferred to him or her for the
  135  duration of the home warranty pursuant to this section must
  136  notify the builder or home warranty association that he or she
  137  has purchased the home and therefore is the warrantee under the
  138  home warranty. Such notice may be given at any time while the
  139  warranty remains in effect. A builder or home warranty
  140  association may not require in the terms of a warranty a shorter
  141  notice period than provided for in this subsection.
  142         (5) A builder may not charge a fee for a transfer of a
  143  warranty which occurs automatically pursuant to this section.
  144         (6) This section does not:
  145         (a) Modify or extend the commencement date or the duration,
  146  or expand the scope of coverage, of the express written warranty
  147  or home warranty, as applicable, beyond the express written
  148  warranty’s or home warranty’s terms.
  149         (b) Require a builder or home warranty association to be
  150  obligated under a warranty that has become null and void
  151  pursuant to the terms of the warranty.
  152         (c) Require a builder that is obligated under and provides
  153  a home purchaser an express written warranty to obtain a license
  154  under the Florida Insurance Code, and such practice does not
  155  constitute the transaction of insurance subject to the
  156  requirements of the code, unless otherwise required by law.
  157         (d)Permit the provision of indemnification against
  158  consequential damages arising from the failure of any structural
  159  component, which practice constitutes the transaction of
  160  insurance subject to the requirements of the Florida Insurance
  161  Code.
  162         (e) Require any subsequent purchaser to be bound by the
  163  terms of a home maintenance contract unless he or she agrees to
  164  the maintenance contract being assigned to him or her.
  165         Section 4. Chapter 634, Florida Statutes, entitled
  166  “Warranty Associations,” is renamed “Warranties and Warranty
  167  Associations.”
  168         Section 5. This act shall take effect July 1, 2024.