Buildings today are increasingly reliant on electric service of varying voltages, including condominiums. Beyond simply powering lights and appliances (120V), larger equipment like HVAC systems, and large appliances (240V), there are complex low voltage systems and components that transform voltages for various uses. Often overlooked in Florida is the “hole” in the statutory warranties regarding electrical systems that has been there for decades but seems of increasing importance today. This hole emphasizes the importance of sufficient flow-down and flow-up contract clauses to allocate the risk to the persons performing the work.

Florida’s Statutory Warranty Framework

Florida has robust statutory warranties for condominium purchasers. Section 718.203, Florida Statutes, provides separate warranties from the developer (718.203(1)), and from contractors, subcontractors, and suppliers (718.203(2)). The developer warrants both “fitness and merchantability” and the contractor/subcontractors/suppliers warranty only fitness, but that’s not the hole. The hole becomes visible by comparing the developer’s warranties with those from contractors/subs/suppliers. 

Identifying the Statutory Gap

The developer warrants (among other things): "mechanical, electrical, and plumbing elements serving improvements or a building." But contractors, subcontractors, and suppliers only warrant: "mechanical and plumbing elements serving a building or an improvement."

Why is "electrical" missing, particularly when electrical service is essential to support current technologies? There is no good answer, and due to the age of the statute, there is no distinction between higher and lower voltage systems. 

Both developers and contractors can protect themselves more fully by ensuring that the risk of warranty breaches rests on the party responsible for performing that work. This is most commonly affected by flow-down and flow-up clauses.

Closing the Gap through Contract Drafting

Developers frequently solve for this gap contractually with the contractor by adding language to the contractual warranty clauses that either broadly equalizes the warranties that the developer gives to unit owners with those that the contractor provides to the developer, or that specifically references the statutory warranties. 

Contractors should likewise (or in any event) manage the risk downstream to the subcontractors actually installing the electrical systems by mirroring the language from the Owner/Contractor agreement or the statute — flowing “down” their obligation to the owner and flowing “up” a warranty from the subcontractor to the contractor. 

This “electric hole” has existed in the statute for many years but is often overlooked in contract drafting. With the importance of electrical systems in today’s buildings, it is imperative to manage this risk contractually.