Wednesday, June 12, 2013

Florida Real Estate Disclosure Law

Florida real estate law requires sellers to divulge all the known problems and flaws of a home or property when it’s put on the market to be sold. The information is called a seller’s disclosure and it’s given to buyers who want to know the reasons for the property pricing.

This disclosure should share everything seen and unseen that’s known about the property by the seller. It acts as a guide to the value and price of a property being sold.

The disclosure must be filled out honestly and is designed to help sellers know everything they want to know about problems in the history of the property.

Sellers have to comply with Florida’s laws about disclosure requirements. Any sellers who do not disclose what is reasonable for them to have known can be held legally and financially responsible. 

The fallout from hiding what should have been disclosed can lead to very expensive lawsuits. The buyer can sue a deceitful seller for fraud. The statute of limitations for the Florida Seller’s Disclosure Law is five years in Florida.

The condition of the real estate property is based on what the seller knows about the property condition. Buyers, sellers and realtors refer to the information when evaluating, marketing, or presenting the seller’s property to prospective buyers.

Get a Home Inspection

In order to prevent surprises it’s a good idea to have a home inspected before it goes on the market. This way any serious, potentially problematic faults, weaknesses or failures will be known. Eventually an inspection will be done by the buyer and if you fear there are issues but ignore them, you’ll end up paying for their repair, replacement or failure to disclose.
Disclosing Material Facts and Hidden Defects

The Florida Seller’s Disclosure became mandatory in 1985 when in a landmark case, Johnson v. Davis, the Florida Supreme Court found that sellers cannot conceal material defects in property for sale.

In Johnson v. Davis, the sellers denied that marks on a ceiling were leaking. When the buyers wanted to purchase the home the sellers said that the roof did leak, but that it had been repaired. However, when it rained, the roof leaked. The buyers sued the sellers and won.

Material defects are any facts that may have a significant and reasonable impact on the market value of the property. Material defects are visible to the eye. Under Florida law, these material defects must be shared with a potential buyer.

According to the Florida Bar: A buyer of residential real estate can maintain a cause of action for nondisclosure of latent defects and is not required to prove a false statement by the seller in order to recover. The seller now has an affirmative obligation to disclose known material defects. Since a buyer has no duty to find a latent defect, but only one that is “readily observable,” a non-disclosing seller may not defend on the basis that a ‘reasonably diligent’ inspection would have disclosed the material defect.

For example, defects in the materials used to build the home must be disclosed by Florida commercial and residential real estate sellers. This is particularly important in older homes where dangerous materials like lead paint or asbestos were included in ceilings or walls.

Non-Apparent Defects

In addition to apparent defects in the home, the state of Florida requires that non-apparent defects are disclosed. Non-apparent defects are Florida disclosures must list serious material defects voluntarily.

Crime Scenes

If a murder or suicide took place in a home or property the information does not have to be disclosed to any potential buyer.

Hazardous Materials or Substances

If hazardous substances or contaminated sites are located on or nearby the vicinity of residential property it must be disclosed according to the Florida disclosure law.

Florida real estate law requires sellers to provide full disclosures when listing a home for sale even if listed "As Is." An “As Is” contract does not relieve a seller of the duty to disclose. An "as is" contract does not allow a seller to withhold knowledge of known defects. Defects that materially affect the value of a property that can’t be immediately seen or discovered by the buyer must be disclosed by the seller.

If a seller tries to repair a defect and does not disclose it and that defect leads to additional damage that they may/may not have been aware of they will also be responsible for this additional damage.

Sellers can only disclose what they are aware of. If a repair was made and seller thought the problem was resolved (in good faith), the seller would need to disclose that a repair was made.
You can’t rely on the honesty of others while buying or selling property. The buyer must be aware and the seller must be cautious.

Whenever buying or selling a property it’s important to consult with an attorney particularly with the many disclosures, and requirements sellers and buyers must provide, sign and review when buying or selling property.

Consult with Eric Lanigan and Roddy Lanigan regarding any real estate issues, contracts or disputes. Eric Lanigan has practiced business, civil, financial and real estate law in Florida since 1976; Roddy Lanigan has practiced since 2007. The Lanigans are experienced attorneys who provide clients with aggressive representation with a personal touch.