Seller Disclosure in Real Estate Transactions
Are you getting ready to put your home on the market? If so, you have many decisions to make; in fact some of the questions you might be asking yourself are: Should I retain a realtor to assist with marketing the property? Do I need legal advice concerning the contract and closing? How much should I list the property for? With so many decisions to make, you probably are not thinking about that water leak you had ten years ago or other problems you might have experienced with your property—when in fact, you should be concerned with these issues and here’s why.
When buying a home, the past general rule was caveat emptor or “buyer beware.” This meant that a seller had no obligation to disclose to the buyer the condition of the sale property, even if that condition still existed. If the roof leaked, the seller had no obligation to disclose that fact. Rather, the buyer had a duty to investigate the condition of the property and if the buyer failed to do so, the buyer had no recourse against the seller.
All that has changed though. Florida law provides that the seller must disclose any facts or conditions about the property that have a substantial impact on its value or desirability, and anything others cannot easily see for themselves. Therefore, when selling your property, the law requires you to disclose material facts about the property you are selling; this essentially means sellers disclosing all facts that could affect the sale price or influence a buyer’s decision to purchase a home. It is best to make the disclosure in writing to avoid any dispute after the closing.
Make sure your written disclosure is incorporated into the purchase agreement and have the buyer evidence receipt of the disclosure form. When selling, you have no obligation to investigate all potential defects with regard to your property; however, you need to disclose facts known to you. If you do not know about a certain condition of the property, it is perfectly acceptable to state you have no knowledge of that condition. Sellers are required to disclose only those property defects of which they have actual knowledge. Under Florida law, an “As Is” clause in the purchase contract does not relieve you from your disclosure duties. You will still need to advise buyers of all material defects that you know about concerning the property.
So… What constitutes a material condition that affects the value of the property or may influence a buyer’s decision to purchase the property? Clearly, structural issues, water intrusion, mold and roof problems must be disclosed. It is best to ask your attorney or realtor what needs to be included in the disclosure, as failure to disclose material conditions can lead to very expensive lawsuits. The buyer can sue you (the seller) for fraud. The statute of limitations to bring such an action is five years in Florida. To avoid these costly mistakes, the general rule of thumb is when in doubt… disclose.