Disclosure obligations for residential vs. commercial property
In 1985, the Florida Supreme Court decided in the case of Johnson vs. Davis that "buyer beware" does not apply to residential transactions. The ruling was that sellers must disclose known material facts that are unobservable to a buyer. So in Florida, from that time forward there has been a distinct difference in the manner in which residential and commercial real estate transactions are handled.
The seller's disclosure requirement is included in all standard FarBar real estate contracts. In addition, most brokers require sellers to complete a separate disclosure form. This discussed 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 caselaw 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 mean that less than ten percent is not material. Whether a defect is material depends on the unique circumstances of the property transaction.
When a buyer believes that a seller has failed to disclose a material defect usually the discovery of the situation occurs shortly after closing. Therefore, it is important to consult with an experienced and expert litigation attorney like David Steinfeld, who has tried these types of cases to verdict before juries and judges 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. Lawsuits in general are expensive and time-consuming, but these types of lawsuits in particular often require a significant number of depositions and, therefore, can become very expensive and very time-consuming. Therefore, it is prudent to carefully examine all of the options available together with David Steinfeld in order to make informed decisions in response to the unfortunate situation.
Should you use a home inspector
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 intentionally. As the saying goes, sometimes the best defense is a good offense, which when translated into residential real estate transactions mitigates in favor of retaining qualified inspectors to thoroughly assess the property.
The Law Office of David Steinfeld has utilized a number of such inspectors as expert witnesses in lawsuits concerning disclosures and can guide and recommend clients to these professionals as part of guiding and assisting either a buyer or seller in such real estate transactions.
The Palm Beach Business Lawyer Blog
Board Certified expert in Florida business law, David Steinfeld has almost 25 years legal experience.