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.
Applying Jury Verdict Method in Quantifying Damages Due to Defective Specifications
March 31, 2026 —
David Adelstein - Florida Construction Legal UpdatesAn older case deals with three important considerations: (1) defective specifications; (2) whether the defective specifications were misleading or misrepresentative; and (3) applying the jury verdict method in quantifying damages.
In Metric Construction Co., Inc. v. U.S., 80 Fed. Cl. 178 (Fed. Cl. 2008), a contractor was contracted by the federal government to construct a warehouse. There were defects in the structural steel design specifications underlying the standing seam metal roof installed by the contractor and, as a result, the roof system leaked causing damage. The contractor incurred significant costs in repairing the damage, and pursued recovery of these costs against the government. The contractor claimed the structural steel design serving as the framework for the metal roof was defective and misleading and caused the leaks.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Builders Support Most of Bipartisan Housing Reform Bill in Congress
March 31, 2026 —
Esther D'Amico - Engineering News-RecordSeveral homebuilding groups say they support most of the massive housing reform bill making its way through Congress but want to see certain provisions including those related to build-to-rent and manufactured homes changed before it advances any further.
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Esther D'Amico, Engineering News-RecordENR may be contacted at
enr@enr.com
Modular Construction’s Hidden Risk: Where Things Go Wrong Between the Factory and the Field
June 15, 2026 —
Jack Mayo - ConsensusDocsIntroduction
As modular and prefabricated construction methods are increasingly adopted, so too are the potential challenges that come with them. The appeal is straightforward: faster timelines, controlled fabrication environments, and reduced on-site labor demands. But the risks that accompany these benefits are often less clear—and, in many cases, poorly defined.
For example, what happens when a prefabricated component is delayed past its installation window? Who is responsible for a defect discovered inside a sealed, installed module? What happens to warranty obligations when a prefabricated component must be modified on site?
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Jack Mayo, Jones Walker LLPMr. Mayo may be contacted at
jmayo@joneswalker.com
Southwest Super Lawyers Recognizes 50 Snell & Wilmer Attorneys in 2026 Rankings
June 15, 2026 —
Snell & WilmerPHOENIX (April 22, 2026) – Snell & Wilmer is pleased to announce that 50 attorneys in the Phoenix and Tucson offices have been selected for inclusion in the 2026 Southwest Super Lawyers publication. Of those 50, four were recognized for the first time and 24 were recognized as Southwest Rising Stars. Super Lawyers is a listing of lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The selection process is multi-phased and includes independent research, peer nominations, and peer evaluations. Super Lawyers was first published in 1991 by Law & Politics and was acquired by Thomson Reuters, Legal in February 2010. Thomson Reuters is a leading source of information for businesses and professionals. The below Snell & Wilmer attorneys have been selected for inclusion in the 2026 Southwest Super Lawyers rankings.
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Snell & Wilmer
Fraud Allegations Stymie Additional Insured’s Request for a Defense
May 14, 2026 —
Tred R. Eyerly - Insurance Law HawaiiThe Federal District Court granted the insurer’s motion to dismiss the insured’s complaint seeking a defense of the underlying case alleging fraud. Renovation Realty, Inc. v. Colony Ins. Co., 2026 U.S. Dist. LEXIS 21409 (S.D. Cal. Jan. 30, 2026).
Mara Fortin sued Renovation Realty and others (“Fortin litigation”) from the fraudulent sale of a residence. The underlying complaint alleged Renovation “deliberately misrepresented of the residence as ‘completely remodeled’ and ‘meticulously maintained’.” The defendants, however, including Renovation, “knew from sources including a pre-renovation termite report documenting fungus and dry rot . . . that the Property harbored pre-existing material defects.”
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
California’s Retention Reform on Private Construction Projects
February 17, 2026 —
Michael McKeeman - The Construction SeytRetention has long been a contentious issue in California construction. Traditionally, owners withheld retention of 10% from each progress payment until completion, arguing it was necessary to ensure performance, quality and timely delivery. Contractors and subcontractors, however, often struggled with cash flow, payroll, and material costs while waiting months—sometimes even years—for withheld retention.
Recognizing the financial challenges contractors and subcontractors face, the California legislature passed Senate Bill 61 (“SB 61”), now codified under California Civil Code Section 8811 and effective January 1, 2026, limiting retention to 5% on private works of improvement, aligning with the public works standard in place since 2012. The law’s intent is clear—ease financial strain on contractors and subcontractors while still providing owners with security (albeit reduced) with respect to project completion.
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Michael McKeeman, SeyfarthMr. McKeeman may be contacted at
Four Families Now Live in the Season Six Rock the Block Homes in Grantsville, Utah
April 20, 2026 —
Hamlet HomesSALT LAKE CITY, April 20, 2026 /PRNewswire/ -- The premier of Rock the Block season seven aired last Monday and is set in Las Vegas, Nevada. Rock The Block is HGTV's highest rated show. Last year, season six was set in Utah and had HGTV's highest rating yet, with over 14 million viewers. All episodes of season six were filmed in the Worthington Ranch community in Grantsville, Utah. The four homes on the show were built by Utah builder Hamlet Homes. During the show, the location of the four Rock The Block homes had to be kept secret and were surrounded by a locked gate. After over a year of being inaccessible, the Utah public was invited in May 2025 to tour the homes and help raise money together for charity. On May 30-31, 2025, Hamlet hosted a 'Rock The Block Party' where the public was able to walk through the homes made famous by the show.
Hamlet Owner, VP of Marketing & Design Tami Ostmark shares stories from the show and her perspective of what it's like to be the builder on a national show like this. Ostmark was on set almost the entire time. "As expected, there were times when there was tension on the set. All four designers were super competitive with each other. It's amazing that the production team was able to produce the show as well as they did. I'm very impressed," said Ostmark.
Another interesting point related to the show is how much work the local builder is responsible for. Some nights as many as 30 Hamlet team members worked through the night to keep up with the pace of production. "Each designer provided their own trusted carpenters to do finishing work. In two of the cases, designers' flew their favorite carpenters in to carry out their visions. Given the quick turnaround, it's not always practical for finishing work to be permanent. Sometimes, it just needs to look appealing on camera," said Ostmark. This is frequently referred to as 'TV Magic'. "When the show was over, Hamlet re-did any areas that required extra attention". The show really does shoot in only 7 weeks as depicted. This creates a fast pace that was very exciting to be a part of", continued Ostmark. All four of the homes featured on the show have since been purchased; four Utah families currently call them home.
ABOUT HAMLET HOMES
Hamlet Homes (www.hamlethomes.com) crafts quality customer-oriented townhomes and single-family homes located in attractively designed communities in Utah and Idaho. Since the company's founding in 1995, Hamlet has built over 5,000 homes in 80 communities. The company is a proud recipient of many awards on Sustainable Business & Design, Quality Builder Awards; recognized both locally and nationally. Named by the Salt Lake Chamber of Commerce as the 'Veteran Owned Small Business of the Year, in 2019'. Hamlet has since been named several times to the Professional Builder's Housing Giants List and annual HOME AWARDS Best Customer Experience. Most recently in 2026, Hamlet was named Utah's 'Best of State for Real Estate Development and Utah Businesses 'Best Companies to Work For' for the 6th consecutive year.
