Understanding The Seller’s Disclosure Obligations For Property Defects

When it comes to a Seller’s Disclosure Obligations regarding property defects, many Florida real estate buyers are clueless. In this article, we will give you a basic overview of what a seller’s disclosure obligations are during a real estate transaction. Read on to learn more.

The Seller’s Disclosure Obligations for Property Defects

In order to protect home buyers from defects in a property, fraud, and other problems typically associated with the acquisition of real estate, sellers in Florida are obligated to properly disclose relevant information about the property they are selling. More specifically, real estate sellers in Florida must inform buyers of any known significant property defects that may not be easily visible to buyers. However, it is important to keep in mind that buyers still have the responsibility to order a thorough inspection of the property they intend to buy.

Material Defects in Real Property – What You Need to Know

The most common way that a Seller’s Disclosure Obligations can be reduced is the requirement to disclose only one type of property issue known as “material defects.” The term material defects refers to any substantial defects that would likely have a negative impact on the buyer’s readiness to purchase the property or the value of the property. Defects that can have a negative impact on health and safety are also considered material defects. Examples of material defects include things like faulty electrical wiring or a cracked foundation. In essence, a material defect is one that is undeniably substantial.

When it comes to defects that are not easily observable, they are known as “latent defects.” In Florida, there must be proper disclosure of defects that would not be evident or clearly visible to an average real estate buyer.

Florida Regulatory Laws Regarding the Seller’s Disclosure Obligations for Property Defects

In the State of Florida, there are many laws that apply to a residential real estate seller’s disclosure requirements. Two of them are:

• Florida Statute §689.25, which states that if any particular property was ever presumed to have been the location of a suicide, homicide, or any type of death, this will not be considered a material defect and therefore will not be required to be disclosed by the seller. Although most real estate buyers would probably want this information, sellers are not obligated under Florida Law to disclose these facts; and
• Florida Statute §475.278, which deals with real estate licenses, broker relationships, and notices.

In addition to the two main laws, several other important statutory disclosures must be mentioned. Some of these are:

• Florida Statute §404.056(5), which provides protection for real estate buyers by requiring sellers to disclose in writing all dangers associated with radon gas;
• Florida Statute §161.57, which requires real estate sellers to disclose potential defects regarding coastal erosion, where properties are subject to state and federal law limiting construction, ensuring compliance with environmental standards; and
• Florida Statute §720.401, which states that real estate buyers looking to purchase real property in a community where there is an existing homeowner’s association must be informed of the requirement to become members of that association in the event that they purchase the property.

Exemptions from the Seller’s Disclosure Requirements in Florida

Although Florida has written into law certain details real estate sellers are not required to disclose, if a buyer directly asks a seller a specific question regarding an issue with the property, the Florida Statute that grants the seller certain non-disclosure rights will cease to shield the seller if he or she lies to the buyer when answering the question. Situations like this one can be complicated and the seller may decide not to answer the buyer’s question at all, which is allowed under Florida Law.

Failure to Comply with the Seller’s Disclosure Obligations – What are the Consequences?

In the State of Florida, there is not any one law outlining all of a Seller’s Disclosure Obligations. Rather, there are many laws governing this, each of which comes with severe consequences on a seller of residential real estate in case of failure to disclose all latent and material defects in a property before closing. Failure to comply with the Seller’s Disclosure Obligations can give buyers legal grounds to back out of the real estate purchase contract and/or entitle buyers to sue sellers for damages.

For more information on what laws govern the disclosure obligations of a seller during a real estate transaction, call us today at (305) 921-0440 or send us an email to [email protected].

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