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Disclosure Requirements for Florida Real Estate Transactions

You might be familiar with the phrase “caveat emptor,” which is Latin for “let the buyer beware.” This legal doctrine often places the responsibility on buyers to reasonably inspect property prior to purchasing it and to take responsibility for its condition. In the real estate context, however, an increasing number of states, including Florida, now require sellers to disclose certain defects and other information about the property to buyers. If you are purchasing real estate in Florida, it is important that you are aware of these requirements and that you understand what sellers are legally required to tell you about the property.

In the 1985 case of Johnson v. Davis, the Florida Supreme Court declared a new rule of law that effectively replaced the rule of caveat emptor in the context of residential real estate transactions. The Court held that where the seller of a home knows of facts materially affecting the value of the property that are not readily observable and are not known to the buyer, the seller has a duty to disclose those facts to the buyer.

As a result of Johnson v. Davis, sellers in Florida now have a duty to disclose known material defects to buyers. In Jensen v. Bailey, the Courtclarified this point. It held that sellers do not have a duty to disclose facts or defects they should have known about; the duty only extends to facts or defects of which the sellers have actual knowledge. This duty to disclose also extends to residential real estate brokers.

Disclosure requirements cannot be contracted away or satisfied through “as-is” provisions, other addendums or partial disclosures. The Florida Association of Realtors provides a standard seller disclosure form that covers many common categories and characteristics of interest to buyers. While Florida law does not require that disclosures be in writing, it is best to make disclosure statements in writing—rather than orally—to avoid potential discrepancies should a problem arise with the property later.

On a related note, Florida law (Fla. Stat. § 689.261) also requires that sellers present buyers with property tax disclosure summaries.

While buyers do not have a responsibility to discover defects that are not readily observable or ascertainable, buyers should remember that sellers are not required to disclose facts that are already known to the buyer or facts that are readily observable or ascertainable to the buyer. Thus, buyers must make reasonable efforts to discover material facts that affect the value of the property.

In sum, the four elements of a nondisclosure claim are as follows:

The seller must have knowledge of a defect in the property;
The defect must materially affect the value of the property;
The defect must be not readily observable and must be unknown to the buyer; and
The buyer must establish that the seller failed to disclose the defect to the buyer.

If those elements are satisfied, the buyer could have a nondisclosure claim and the seller could be liable for damages sustained by the buyer. Consult with an attorney at the West Palm Beach based Law Offices of Larry E. Bray, P.A. for help.