One home warranty lawsuit involves American Home Shield, a third-party provider of extended coverage currently caught up in a class action lawsuit. In this case, according to Insurance Law & Litigation Week (3/26/12), American Home Shield is accused of bad faith insurance after many homeowners allegedly legitimate claims were systematically denied.
According to the source, the American Home Shield lawsuit claims that benefits for covered items, including air conditioning units and various appliances, were denied outright or only partially repaired.
The partial repair in this home warranty case can also work to the insurance provider's advantage, it is alleged, given that a partial repair will increase the likelihood of a future breakdown, affording the provider an opportunity to charge an additional fee to complete the repair.
The lawsuit involving American Shield seeks class action status for customers of the provider who live in Florida.
The Sunshine State is also embroiled in a case that may absolve developers of a shared community from addressing problems with infrastructure such as roads and sidewalks.
A homeowner's right to 'warranty of habitability' holds a developer liable for the structure directly related to the home, or a homeowner's specific living area in a shared community. However, a recent lawsuit challenged whether or not a developer in a shared community should be held liable for sidewalk defects, or potholes and other problems in a street leading to homeowner's residence.
The Sun-Sentinel of Fort Lauderdale (2/8/12) reported that a lower court sided with the developer on the issue. However, the 5th District Court of Appeals reversed that decision, finding that a home warranty in such a case should extend to a shared community's common areas, including the aforementioned roads and sidewalks and also encompassing gates and perimeter walls.
The original lawsuit was brought by a home owner's association (HOA) in Orange County and the case might have ended there, had the ruling by the 5th District Court of Appeals not conflicted with prior case law. The issue now goes to the state Supreme Court.
Meanwhile, a luxury condo complex in Canada originally touted for it's environmental friendliness has been anything but friendly for the residents of 85 completed units of Bellavera Green located in Leduc, Alberta. According to a Canwest News article (2/23/12), inspectors found violations involving a fire alarm system, firewalls and an exterior staircase, which was so badly built and installed it was deemed unsafe and summarily condemned.
Other violations prompted building inspectors to seek an evacuation of the 150 residents currently living in the brand-new complex, in the middle of winter. While home warranty insurance was not mentioned in the article, Canwest reported that an order issued by the municipality to address the issues was ignored by the builder—hence the issuance of an evacuation order.
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The purchaser of a new home in Florida, built by a high-end developer, had to live with a gaping hole in a living room for months after repairmen had to breach a wall to shore up a major leak that allowed rainwater to drop into the wall's interior, swelling and discoloring the wall and prompting expensive art to loosen and drop to the floor. The large home, which cost the buyer almost three-quarters of a million dollars, was worth less then half of the purchase price when defects were factored in, even though the home was new.
Home warranty protection is designed to protect the homeowner from such defects in construction and workmanship. By the same token, home warranty lawsuits are designed to protect the homeowner when those warranties don't…