Real Estate Disclosures
That should have been disclosed!
Don't get caught not knowing the facts about real estate disclosures.
When buying a home condo or town home there are certain things that need to be disclosed about the property. Below are a few rules that should be followed.
Rule #1: Material Defect Should be disclosed.
First of all… what is a material defect? A material defect is one that, in the buyer’s opinion, is so substantial and important to the property value. If this was known, it would have influenced the buyer to offer less money or reconsider the purchase altogether.
Here is a list of material defects that have been brought up in Florida cases:
1. Building was built in violation of building codes.
2. Seller fraudulently obtained flood insurance and misrepresented amount of premium.
3. Seller misrepresented the tract as being waterfront or on a conservation tract.
4. Seller concealed pending condemnation of which they had actual notice.
Rule #2: All material defects MAY NOT have been disclosed to the buyer.
Good: The seller must disclosed defects that are materially affecting the value of the property. These are defects that are not readily observed and not known to the buyer. This is a law due to the Supreme Court case Johnson vs. Davis.
Bad: Defects that are (1) not known to the seller, (2) known to the buyer or (3) readily observable to the buyer do not necessarily need to be disclosed.
Rule #3: The seller does not have to repair or correct defects that materially affect the property value.
The only responsibility of the seller is to disclose the defects to the buyer. This is usually done on a ‘Property Disclosure Sheet.
Here are some commonly asked questions.
Question: Is it required to disclose a low appraisal?
Answer: No. An appraisal is only one person's opinion of the property value. The new buyer is free to get their own appraisal.
Question: Must previous inspection reports be disclosed?
Answer: Upon written request of any party to the transaction, a licensee in Florida must provide copies of any termite and roof inspection reports ordered by or in the licensee´s possession, provided that the inspections were performed on the property within the year preceding the effective date of the sale/purchase contract. No other reports must be produced; however, if the reports made the seller and agent aware of facts that materially affect the property value, these facts must be disclosed to the buyer.
Question: Is it required by law to disclose a previous problem that has been repaired?
Answer: There is no general duty to disclose problems that occurred in the past, were repaired and do not impact the condition of the property as represented in the contract. Unless there is physical evidence or expert testimony that previous repairs were inadequate to resolve the problem, the licensee and seller are not obligated to reveal the past problem to the buyer.
*This is for informational purposes only. This is not a legal opinion. Any questions you may have should be directed to an attorney.