Florida disclosure law: sellers and agents, tread carefully

If you intend to sell residential real estate in the sunshine state, you are subject to the Florida’s disclosure law. And, after the 12-weeks average it takes to turn your property over—that’s 84 days of prepping and inspecting, paying out for repairs and advertising, crossing your fingers throughout the closing month, not to mention  the general stress that comes with any type of major life change like selling a home, the last thing you need is your closing to be held up or aborted because of Florida real estate law noncompliance. The Florida disclosure law requires that sellers disclose any potential problems with a property.

Virtually all U.S. states have disclosure mandates that property owners must comply with when selling. These disclosure requirements were designed to protect homebuyers from property defects and fraud, and they vary from state to state.

In Florida, if the selling party withholds such information about the property, then he or she may be committing fraud as specified in the Florida Disclosure Law. Additionally, as a representative of the owner, under state and federal laws, the seller’s real estate agent is also liable.

While buyers do have the responsibility to have the property inspected, if the sellers’ and their realtors fail to disclose any significant defects that may not be easily visible o the buyer, it is still there responsibility to make those known.

While the Florida Association of Realtors offers a “Seller’s Property Disclosure Form,” to help sellers stay in compliance, there is no statutory requirement to do so.

Additionally, there are several property disclosures that are federally mandated. The major disclosures set by the federal government involve lead paint, asbestos, wetlands, and floodplain disclosures. If any of the details concerning a particular property’s unsatisfactory condition as identified by Federal law, is omitted during the closing process, the selling party is subject to penalties that can be substantial.

However, few Florida homeowners know exactly what they are required to disclose and what they can to keep to themselves as concerns Florida’s disclosure law. From leaky roofs to paranormal activity, here is what a seller is required—and not required—to disclose in a Florida real estate transaction.

Typical Florida Disclosures

Disclosure laws vary by state, but here’s what sellers are required to disclose, and what buyers should be aware of, before signing their Florida closing contract.

Material and Latent Defects. A material defect is anything that is likely to impact property value or the health and safety of future occupants. Examples include toxic mold, termite damage, or a cracked foundation. Latent defects are those that might not be visible to the buyer but are known by the seller to exist, such as a leaky roof that is only apparent during heavy rain.

Endangered species. As specified in Florida disclosure law, endangered species living on a property may need to be captured and relocated before any development can begin. One example is the gopher tortoise. Both it and its burrows are protected by state law.

Radon. Since radon is quite common in Florida, the law requires that a radon gas disclosure must be provided before the sale of any building is finalized. In fact, all Florida real estate sales contracts already contain the required language. Vacant land is exempt from this requirement.

Code enforcement violation. If a home has a pending code enforcement action against it the seller is required to disclose this in writing to the prospective buyer as well as notify code enforcement officials of the property transfer, including the new owner’s name and address.

Coastal properties. When selling a coastal property, the seller must disclose to the prospective buyer the potential for erosion, as well as any regulations regarding specialized construction requirements, beach preservation, and sea turtle protection.

HOAs. The Florida Disclosure law also requires sellers to disclose to potential buyers if they are required to have membership in a homeowner’s association.

What You Are Not Required to Disclose

While Florida law requires the disclosure of coastal erosion, there is currently no statute requiring sellers to disclose if a property has the potential for flooding. The Florida Association of Realtors has a form to use to disclose flooding, but its use is voluntary.

Sellers are also not required to tell potential buyers that someone died in the home from an such as HIV or AIDS.

Unusual Florida Disclosure Requirements

Occasionally a community may have a property where a potential sale is hindered by an infamous association. What if the property was the site of a murder or suicide? What if the house is supposedly haunted? What if there is a sex offender in the neighborhood?

We have good news for anyone desiring to change residences because they believe their house is haunted. You are not required by Florida law to disclose that your property is haunted. Nor are you required to reveal that a murder or suicide occurred at or near the residence.

Real estate law has a term for such real estate. They are called stigmatized properties and come in a few varieties. A property can be stigmatized by paranormal activity, a murder, suicide, or crime, among other reasons.

There is even a type of stigmatization called public intrigue, where a property gets a lot of attention because it was used in a popular TV show or movie. A popular recent example is Walter White’s Albuquerque residence in Breaking Bad. In this case, the homeowners had to build a fence to keep out onlookers. Some properties even require a complete remodel so they are less recognizable, as is the case with the infamous Amityville house, which has been given a new look to remove those iconic yet creepy windows.

With many of these issues, it is up to the potential buyer to do their own due diligence when assessing a property for purchase. Several areas of Florida are at risk for periodic flooding, hurricanes, and other damaging weather, and when looking at property in these locations they would be wise to ask about any past occurrences.

Likewise, local crime statistics and the addresses of nearby sex offenders are matters of public record and easily found if a potential buyer is concerned enough to do a little research.

Using the Disclosure Form

Sellers in Florida are not required by law to use the disclosure form provided by the Florida Association of Realtors, but this form is quite comprehensive and includes every possible flaw or situation with a home that might come up during a sale. Therefore, it is an extra layer of protection against legal action.

By using a non-standard form, a seller might accidentally forget to mention something that could be an issue. If you haven’t sold a property in a while, you’re still unclear on what constitutes a defect, or you’re unsure on what you should disclose, use the form.

The Consequences of Misinformation

Failure to provide the required disclosures, or giving false information to the buyer, can have serious legal repercussions. Withholding information or giving a false disclosure statement can give the buyer legal grounds to either back out of the contract or, in the case the purchase goes through, sue the seller for damages. Contempt of Court charges may also be brought against the seller if they knowingly signed a false disclosure statement.

However, it can be difficult to prove that the seller knew about a latent defect and purposefully excluded it from the disclosure. As a buyer, knowing what steps to take when you discover a defect after purchase will help you pursue the appropriate legal remedy.

Your Lawyer’s Role

A licensed Florida real estate lawyer can help you to either prepare a disclosure or, in the case of purchasing a home, review the seller’s disclosure to make sure all the legal requirements have been met. The ideal disclosure should be in writing and should be signed by both parties to acknowledge both delivery and receipt.

Contact the Florida Bar Board-Certified Attorneys David E. Klein. and Guy Rabideau at Rabideauklein.com. They have the expertise and experience you need to ensure that your interests are protected throughout your real estate transactions in the Town of Palm Beach, across the Palm Beaches and throughout Florida. Contact Rabideau Klein today to discuss the legal implications of your Florida property transactions.

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