Turnover Traps for Community Associations: Investigate First, Release Claims Later
April 14, 2026 —
Nicholas B. Vargo - Ball Janik LLPTurnover of a community association from developer control to owner control is a uniquely vulnerable moment. Developers are increasingly presenting Florida condominium and homeowners’ associations with “standard” settlement or release agreements at turnover, often being framed as routine steps to finalize the transition of control. In reality, these agreements can have sweeping consequences, including the release of construction-defect claims before the association has conducted any meaningful independent evaluation.
The developer has years of project knowledge and access to plans, subcontractors, and internal records. The newly elected board is just beginning to organize, obtain documents, and understand the property’s condition. Many defects, especially those involving roofing, waterproofing, windows, or structural components, are latent and not yet visible. Signing a release at this stage means the association is making a binding decision under conditions of uncertainty, without full information, to release all future potential claims.
Over the last few years, there has been a rise in reports of developers offering a packaged deal: they agree to complete certain repairs, often minor punch-list or cosmetic items, and to “forgive” an alleged financial deficit (often around $50,000) supposedly owed by the association from the developer-control period. In exchange, the association is asked to sign a broad release covering all claims, including known and unknown construction defects. To a new HOA board that received their community with limited operating and reserve funds, they are left with a difficult decision to either accept the developer’s offer or assess their owners to pay this alleged debt.
These agreements are occasionally presented through community management companies, which may describe them as “standard” or "routine.” Whether due to misunderstanding or influence from the developer, management companies can unintentionally reinforce the idea that signing is expected. Any recommendation provided to HOAs about whether to sign these releases could open community management to liability down the road. The best practice for both associations and community managers is to refer any agreements to be reviewed by general counsel for the association.
The following two case studies illustrate the real-world consequences:
Case Study One: A newly transitioned board relies on its management company to negotiate with the developer-builder to resolve irrigation issues, pond concerns, and signage deficiencies, along with forgiving an asserted financial shortfall. In exchange, the board signs a broad release covering all claims, including latent defects.
Within a year, several punch-list items remain incomplete, and more serious issues arise. When the association demands completion, the developer delays, prompting the association to seek advice on how to enforce the settlement agreement. The association hires counsel to hold the developer responsible for both the previously agreed-upon items and newly identified construction defects. However, when the association brings claims against the developer, the developer points to the release of all potential construction defects in the community. Thus, the only remaining remedy is limited to enforcement of the specific punch-list terms. The community, still relatively new, has no viable claims against the developer-builder for the construction defects. With warranties expired and the release, the association must fund repairs through special assessments, despite defects that would otherwise have been actionable.
Case Study Two: A community is presented with a similar agreement as above. The management company encourages execution, suggesting it is standard and even telling the board to “name your price.” The developer also pressures the newly elected board to sign.
Instead of signing, the board consults with their attorney. Counsel advises the board not to sign the release and recommends further investigation. Engineers are retained and identify early indicators of broader issues, including stucco cracking, water intrusion, and irrigation deficiencies. Based on this information, the association declines to sign the release. Subsequent evaluation reveals potentially significant construction-defect claims, allowing the community to pursue recovery that would have been lost under the proposed agreement.
These scenarios underscore a fundamental point: signing a release at turnover is not an administrative formality—it is a major legal decision. Board members act in a fiduciary capacity on behalf of their community, and their decisions can bind all current and future owners. At turnover, an association’s right is to investigate and pursue claims. Preserving that right until a full and independent evaluation is completed is not adversarial—it is responsible governance.
Accordingly, associations should retain independent evaluations of the property and consult qualified legal counsel before signing any “standard” agreements, especially ones involving a release of future claims.
Nicholas B. Vargo is a partner in Ball Janik LLP’s Construction Practice Group. He may be reached at nvargo@balljanik.com.
Achieving Sustainability Through Design-Build Delivery: Part I – An Overview
September 21, 2026 —
Joshua M. Pruett, Jennifer L. Harris & Tiffany A. Harrod - Peckar & Abramson, P.C.This article was written for the AGC’s Law in Brief and first appeared here.
Sustainability is no longer optional. What was once a matter of public policy or corporate preference has become a regulatory mandate and is reshaping how construction projects are designed, built, and operated. This mandate is not solely figurative. Rather, states have started to follow Europe’s lead by beginning to codify sustainability requirements into regulations and law. California led the charge by adding mandatory embodied-carbon emissions regulations into CALGreen, and other states, such as New York, have introduced bills to implement similar requirements. Owners, designers, and builders must now treat sustainability not as aspirational, but as a clearly defined contract issue from the outset, particularly where the project is expected to achieve a third-party rating, meet energy or resiliency targets, qualify for incentives, or comply with evolving green building codes.
In the federal public sector, construction contracts include a layered compliance framework—executive order-inspired policy, FAR-mandated clauses, and enduring statutory requirements—requiring contractors to integrate sustainability into design, material selection, and lifecycle management. Staying ahead means aligning with regulatory standards, conducting life-cycle cost analyses, and embedding sustainability into every procurement and construction decision.
Reprinted courtesy of
Joshua M. Pruett, Peckar & Abramson, P.C.,
Jennifer L. Harris, Peckar & Abramson, P.C. and
Tiffany A. Harrod, Peckar & Abramson, P.C.
Mr. Pruett may be contacted at jpruett@pecklaw.com
Ms. Harris may be contacted at jharris@pecklaw.com
Ms. Harrod may be contacted at tharrod@pecklaw.com
Read the full story...
Trend Continues Where Unlicensed Contractors Have No Recourse
July 13, 2026 —
David Adelstein - Florida Construction Legal UpdatesThere’s been a recent trend in Florida case law that has figuratively “killed” unlicensed contractors. Here’s another one. The moral to this trend and case is simple: make sure you have the proper licenses prior to serving as a contractor under Florida law. Trying to be cute, as seemed to be the situation in this case with a creative argument, is not an argument that will carry the day and your resources will be devoted to being creative versus the ultimate merits of the dispute.
In Ramindesign, LLC v. Skarzynski, 2026 WL 1649571 (S.D.Fla. 2026) an owner of real property hired a company to design and construct a spec home on the property. The company and its owner were NOT licensed contractors. The contract stated the company was serving as a “spec developer” and referred to it as the contractor throughout the contract. Other than this, the contract was set up as a cost plus a fee.
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Alexander Hopkins Authors Law360 Article on Wisconsin Supreme Court Coverage Decision
October 06, 2026 —
Alexander G. Hopkins - SDV FenchurchAlexander Hopkins recently authored an Expert Analysis for Law360 examining a recent Wisconsin Supreme Court decision addressing coverage for water damage arising from alleged construction defects.
In “Wis. Coverage Ruling Rejects Strict Ensuing Loss Test,” Alex explores the relationship between construction defect exclusions and ensuing loss provisions, and what the decision means for policyholders seeking coverage when an excluded condition contributes to subsequent damage.
Read the full story...Reprinted courtesy of
Alexander G. Hopkins, SDV FenchurchMr. Hopkins may be contacted at
alexander.hopkins@sdvfenchurch.us
Pulling the Plug, Preserving the Product: Protecting Rights to a Modular Subcontractor’s Work Post-Termination
June 08, 2026 —
Paul Williamson - ConsensusDocsVolumetric Modular Construction (VMC) is a building method where a structure is divided into large components or modules, fabricated in an offsite factory and then transported to a construction site for assembly.[
1] Proponents of VMC hail it as a cost-efficient alternative to traditional building methods that leads to more consistent quality and shorter construction duration.[
2] Due to a growing labor shortage, high demand for compressed project schedules, and stagnant construction productivity rates, the construction industry is embracing VMC.[
3] A recent report on the market size of prefabricated construction estimates that from 2026 to 2031, VMC will grow at a compound annual growth rate of 7.16% and become a 413.11-billion-dollar industry.[
4]
As VMC becomes more prevalent, owners, general contractors, and subcontractors must consider how to effectively contract for modular construction. One important consideration, which this article focuses on, is navigating termination of a modular subcontractor.
Read the full story...Reprinted courtesy of
Paul Williamson, Peckar & Abramson, P.C.Mr. Williamson may be contacted at
pwilliamson@pecklaw.com
At the Frontier of Change: How—or Where—to Rebuild as Alaska's Permafrost Disappears
September 28, 2026 —
Pam McFarland - Engineering News-RecordIn some areas of the tiny subsistence coastal village of Kwigillingok along the Bering Sea in western Alaska, pockets of ground feel squishy, almost gelatinous, rather than solid. It’s an odd sensation, as if there is only a thin layer of muddy soil preventing people from falling into the water beneath their feet.
Read the full story...Reprinted courtesy of
Pam McFarland, Engineering News-RecordMs. McFarland may be contacted at
mcfarlandp@enr.com
We Won’t Permit That Excuse!
June 23, 2026 —
Curt Martin & Richard Eiszner - ConsensusDocsA Texas appellate court recently ruled that a building permit wasn’t a condition precedent for a construction project. That caught our attention. Can you build a commercial project without a permit?
But as we read the case, we see the court’s reasoning. And it reminds us of an important legal principle that should inform our contract drafting and negotiation.
The case was a civil suit brought by the project owner against its tenant improvement contractor for work on a medical spa. The owner claimed that the contractor didn’t perform the work properly and didn’t finish construction. The contractor argued that delays and problems were caused by the owner, alleging numerous failures, including the owner’s failure to secure a building permit.
Reprinted courtesy of
Curt Martin, Peckar & Abramson, P.C. and
Richard Eiszner, Peckar & Abramson, P.C.
Mr. Martin may be contacted at cmartin@pecklaw.com
Mr. Eiszner may be contacted at reiszner@pecklaw.com
Read the full story...
AI Adoption in Construction: A UK Practitioner’s View
April 20, 2026 —
Aarni Heiskanen - AEC BusinessI recently talked with
Chris Brady, an AI adoption consultant based in Birmingham, UK, who has spent 18 years working in construction. Two years ago, he began integrating AI into his work with contractors and SMEs, initially as an add-on service, and it has since become his main business.
Chris now runs
Metrix, an AI consultancy focused on UK construction companies, alongside two other ventures: Trade Upskill, an education platform for construction professionals, and ctrldash.ai, a compliance-automation SaaS for construction SMEs, both of which are soon to launch.
What struck me most in our conversation was how grounded his approach is, built on years of direct industry experience rather than arriving from outside with a technology solution looking for a problem.
Read the full story...Reprinted courtesy of
Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
