Buying a home is a big deal. For those who purchase a home that ends up having material defects, legal recourse may be available.
Whether purchasing a home in a new subdivision, a recently flipped property or an older home with character, those who buy property in Florida expect previous owners to disclose any defects. Although many sellers are honest, there are a few that attempt to circumvent the system and get a good price for a property that has expensive issues.
In some cases, buyers that purchase properties with undisclosed defects have legal options for recourse. Here is some basic information about how state law handles these problems to help you determine if legal recourse is the right option for your situation.
Are property owners required to disclose defects?
The short answer to this question is yes, property owners are required to disclose the presence of defects in properties they are attempting to sell. In reality, the answer is a bit more nuanced. Some of those nuances will be explored in the section below.
Florida requires sellers to disclose anything that may materially affect the value of a property but is not readily observable or known to the buyer. This was established in Johnson v. Davis.
In Johnson, buyers that were interested in purchasing a property included a provision within their offer stating that the property must have a watertight roof. The seller affirmed the roof was watertight, and explained some stains on the walls that were questioned by the buyers as the result of wallpaper glue. After a heavy rain, the buyers noted water was “gushing into the house.” They demanded the sellers replace the roof.
Ultimately, the buyers chose not to purchase the property and demanded a return of their deposit. They also sued the sellers for breach of contract, rescission of contract, fraud and misrepresentation. The case went to the Florida Supreme Court, where it was decided that the sellers knew of the problem and failed to disclose the issue to the buyers. This was deemed a “fraudulent misrepresentation” that justified the return of the deposit. The court also awarded the buyers an additional monetary award to cover various costs and fees.
When does a case for misrepresentation exist?
The answer to this question varies depending on the details of each situation. The first step often involves determining whether or not the property owner was aware of the problem. In situations involving a homeowner that lived in the property, defects like a leaky roof are probably known. However, if the property was a flip, the seller may not be aware. In these situations, it can help to search for evidence that the seller was made aware of the problem before purchasing the property.
It is also important to note that the same rules hold true for homes that are sold “as is.” Owners in these situations are still required to disclose known defects and the buyer can decide whether or not they are willing to take on the risk.
What are some exceptions?
Like all things in life, there are exceptions to this general rule. One of the more common involves whether the problem was public knowledge. If this can be established, the owner may not be required to disclose the issue.
Navigating these issues can be complex. As a result, it is often wise for homebuyers that find themselves in these situations to seek legal counsel. An experienced Florida real estate lawyer can help to better ensure your interests are protected.