BRADENTON -- Inspired by stories of housing problems from Willowbrook condominium residents in East Manatee, Manatee County is proposing state legislation that would essentially void mandatory arbitration clauses in contracts for the sale and construction of homes.
The proposal was suggested Thursday during a public land-use meeting and will be an agenda item during the Florida legislative session in March and presented by the county's Tallahassee lobbyist, Cari Roth.
Homeowners first talked with commissioners Aug. 21, telling them their homes have water intrusion on the third- and second-floor balconies, which has led to sinking floors and loose guard rails. Interior damage includes wood deterioration and wall moisture. Some residents said they've spotted evidence of mold.
Residents told the board mandatory arbitration clauses were included in their contracts with California-based KB Home, which prohibits them from suing the developer for poor construction.
If passed by the state Legislature, a homeowner could file a lawsuit in circuit court against the contractor rather than be forced to go through a mandatory arbitration process.
Through arbitration, legally binding settlements are made outside of court through a third party.
A representative from KB Home and about a dozen residents from Willowbrook were present at Thursday's meeting.
"We're going to repair these units, we're going to make this community whole, and we'll make the residents proud," said George Glance, president of KB Home's Central Florida operations.
Glance took questions from the board, which included whether the company would relocate homeowners whose units needed repair.
"If the repairs are disruptive to their lives, the answer is yes," Glance replied.
Residents took their turn urging KB Home and the county to rectify the situation as a slide show displaying the damages to their homes played on the monitor in the board room.
"Action needs to be done now," said Nicole Camann, a Willowbrook homeowner. "I hope KB is willing to put us somewhere else."
Though over 60 Willowbrook homeowners have requested KB Home to buy back their units, Glance adamantly stated Thursday that would not happen.
Several county commissioners expressed dissatisfaction with the situation Thursday. Commissioner Robin DiSabatino sympathized with residents, saying she had a similar situation with a town home while living in Delaware.
"It's really a shame and a travesty," she said. "It's a shame it took an article in the paper to see what's going on."
"I would not live in those conditions with my family," said Commissioner Joe McClash.
"We're sorry this happened to you," added Commissioner Carol Whitmore.
A memorandum submitted by county attorney Mitchell Palmer said the board does not have authority under state law to take action against a licensed contractor that also holds permits that meet state building code.
Palmer, who practiced real estate law, said no such statute exists in Florida regarding mandatory arbitration clauses for homeowners.
"It is something the board showed interest in and something we are pursuing," he said. "I never recommended mandatory arbitration to a client and never will."
The law, however, could pose a legal conflict for KB Home. In 2005, the Federal Trade Commission fined the company $2 million for violating a 1979 consent order that required KB Home's warranties to include mandatory arbitration of warranty repair disputes that was binding upon KB Home and not on homeowners. A modified consent order established in 2005 requires KB Home to uphold the 1979 order.
"This is a very unusual situation," Palmer said. "To encounter a contractor who's been the subject of a Federal Trade Commission enforcement action is extremely unusual."
After the presentation, the residents met with Glance for more than an hour in a private room at the county building.
"I think they have a lot more information than they did before," Glance said. "We clarified a lot of things because we had open dialogue."
KB Home recently reached an agreement with the Willowbrook Condominium Association. The agreement authorizes a third-party contractor to make repairs inside Willowbrook and the association will select its own contractors, architects and engineers for the repair process at the expense of KB Home.
To date, the county has inspected 71 balconies inside Willowbrook, and 35 have been ruled unsafe by building inspectors.
Nick Williams, East Manatee reporter, can be reached at 941-748-0411. Twiter:@_1NickWilliams