Sellers of residential real estate in Florida are legally required to disclose material defects they actually know about that are not readily observable to a buyer. This article will address what to do when you discover that the seller failed to disclose a material defect in the house you just bought.
Defect disclosure obligations for residential vs. commercial property
In 1985 the Florida Supreme Court decided the case of Johnson vs. Davis and it held that buyer beware or caveat emptor does not apply to residential transactions. The Court stated that sellers must disclose known material defects that are unobservable to a buyer.
As a result, the seller’s disclosure requirement is included in all standard FarBar real estate contracts. In addition, most brokers require their sellers to complete a separate disclosure form clarifying any known material defects.
In Florida from Johnson vs. Davis until the present, there has been a distinct difference in the manner in which residential and commercial real estate transactions are handled. In residential real estate, a seller’s failure to disclose unobservable material defects is one of the most common disputes that lead to litigation and jury trials. This essay discusses what happens when a seller fails to disclose those defects.
What should you do if you discover a defect after closing
It is important to bear in mind that the only actionable defects are those deemed material. That is those that are a significant percentage of the purchase price. While case law has not precisely defined this number, some cases have held that ten percent or more of the purchase price is considered material. But that does not necessarily mean that less than ten percent is not material. Whether a defect is material depends on the unique circumstances of the property transaction.
Because there are many qualified home inspectors and real estate agents who often work with and recommend these businesses to their clients many defects are identified in the pre-closing inspection and addressed through contract addendums. A defect may not even be known to the seller and may come as a surprise but a pre-closing inspection helps the parties identify and address any that may come to light. However, it is those that are not identified before closing that cause issues and are often the subject of subsequent litigation.
When a buyer believes that a seller has failed to disclose a material defect that discovery usually occurs shortly after closing. In an average case, a buyer will not become aware of a significant water leak for example until the first serious rain storm after they move in. Therefore it is important to consult as soon as possible with an experienced and expert litigation attorney like David Steinfeld who has tried these types of cases to verdict before juries and judges. That degree of experience and expertise will help you to determine the next and best course of action for your unique situation.
While a lawsuit may be one option to resolve the situation it is not the only option available. Residential real estate purchase contracts in Florida contain a mandatory pre-suit mediation provision as well that mandates the parties try to identify and resolve the issues before using the courts.
it is important to bear in mind that lawsuits generally speaking are expensive and time-consuming. These types of lawsuits in particular that is a seller’s failure to disclose material defects in a home sale often require a significant number of depositions and can become very expensive and very time-consuming. Therefore it is prudent to carefully examine together with attorney David Steinfeld all of the options available in order to make informed decisions in response to the unfortunate situation.
Should you use a home inspector
In short yes except perhaps where the buyer is a skilled house builder. An inspection by an independent and qualified person can verify the integrity of the home or illuminate problems minor and significant.
As with any substantial purchase, it is important to understand precisely what one is buying. A home purchase is likely the largest investment that the average person can make in their lives. When we buy online nowadays we check reviews. When we vet services we also commonly check reviews because those are readily available online. Unless one is a qualified mechanic when buying a used car it is commonplace to have a mechanic review the car before the purchase. These actions are prudent actions of any buyer so buying a house that is far more expensive than any other purchase in one’s life demands a thorough inspection and review and comprehension of that inspection,
In addition to paying for an inspection, the buyer must also review and understand it. I have seen situations where the inspection identified the very problem of which the buyer complains post-closing and the buyer confessed that they never reviewed the inspection. They paid for it but their real estate agent failed them by not reviewing it with them and the inspector to insure they knew what they were buying. The real estate agent has a duty and obligation to the client and allowing a buyer to commission an inspection either physical or title and never reviewing that is inexcusable but the buyer is the one that pays the price for the agent’s lack of diligence or attention.
Although the seller of a home in Florida is obligated to disclose material defects that they actually know of sometimes sellers do not make such disclosures either as a result of a lack of knowledge or on purpose. There is an appropriate saying that sometimes the best defense is a good offense. Translating that into residential real estate transactions mitigates in favor of retaining a qualified inspector to thoroughly assess the property before the closing.
Confirm the Seller’s awareness of any defects on your new purchase, and options post-closing if you experience defects that were not disclosed. If you still have questions about what needs to be disclosed by a Seller or if your Seller neglected to disclose material defects as a result of a lack of knowledge or intentionally, you may need Attorney support. Give us a call at 561-838-9595 or send us an email at email@example.com. The attorneys at James Brown Law are happy to provide you with a free consultation!