GL Homes, Valencia Reserve settle lawsuit over construction defects

Article Courtesy of  The Palm Beach Post

By Mike Diamond    

Published August 17, 2020


The Valencia Reserve HOA filed a lawsuit in June 2016 alleging GL Homes built a faulty irrigation system that left homeowners with either ‘parched or oversaturated lawns’ among other concerns.

GL Homes has agreed to pay $850,000 to the Valencia Reserve Homeowners Association to settle a four-year old lawsuit alleging that the homebuilder left the community with serious construction defects.

The HOA declined to comment on the settlement but The Post obtained a copy of an email that the Valenica Reserve HOA recently sent to residents of the 1,073-unit community explaining why it decided to agree to an out-of-court settlement. The homebuilder and Valencia Reserve have been locked in a bitter legal dispute since GL Homes turned over control of the development to the HOA in 2015.

Most builders, including GL Homes, are able to address construction defects with homeowner associations after they complete construction. The HOA will usually present a list of deficiencies it wants addressed and then negotiates with the builder to fix them.

But in the case of Valenica Reserve, the parties could not come to an agreement. The HOA ultimately filed a lawsuit in June 2016 alleging GL Homes built a faulty irrigation system that left homeowners with either “parched or oversaturated lawns.”

The clubhouse and swimming pools at Valencia Reserve in suburban Boynton Beach.


In addition, according to the lawsuit, the builder failed to install root barriers around hundreds of oak trees that caused issues to sidewalks and streets. Those two issues alone were expected to cost more than $4 million to repair. There were also issues with the air-conditioning system in the clubhouse.

GL Homes, however, responded in legal papers by putting the blame on the HOA for poor maintenance and argued that the HOA waited too long to file its lawsuit.

In explaining to its residents why it settled, the HOA said it “could not gamble large amounts of homeowners’ money on winning in court and risk the loss of the settlement funds. Thus, we feel that this was both a very good legal settlement and a wise business decision.”

The HOA looked at the GL Homes’ offer as being $1,050,000 because the builder agreed to give up $200,000 in legal fees that it was already legally entitled to collect from Valencia Reserve. The HOA argued GL improperly received special one-time fees from home buyers while it was building the development. The HOA wanted the money but a state appeals ruled in GL Homes’ favor in October. At stake was $867,243. Potentially, though, tens of millions of dollars were at stake as GL and other Florida builders have been routinely collecting the fee for years.

The Valencia Reserve HOA was able to convince GL Homes, as part of the settlement, to forego collection of the $200,000 in legal fees. The HOA noted that the settlement avoids the huge legal expenses of going to trial which could have cost nearly $400,000.

GL Homes, in a prepared statement, said it was confident it would also have prevailed at trial on the construction defect lawsuit but decided to settle in an effort to resolve a matter that had lasted more than five years. It noted that had it prevailed, it would have been entitled again to collect reasonable attorney’s fees.