TAMPA, Fla. – Dec. 7, 2011 – A Florida appeal court, in a non-final opinion, has reversed a lower court’s decision regarding seller disclosures. While sellers are obligated to disclose known defects that materially affect the value of the property and that are hidden or unknown to the buyer, the case focused on whether a seller can be held liable for not disclosing a material defect they “should have known” about.
Florida’s Second District Court of Appeal in Jensen v. Bailey considered a case where the buyer, after closing, filed suit against the sellers and alleged the sellers failed to disclose material defects they should have known about.
No evidence suggested that the sellers actually knew about the defects; instead, the case hinged on whether the sellers “should have known” – a higher standard for disclosure.
The trial court used a “should have known” standard and awarded damages to the buyer.
However, a Florida court of appeal reversed that decision last week.
Citing a landmark disclosure case, Johnson vs. Davis, the appeal court found that the law requires a seller to actually know about a problem.
The appeals court then reaffirmed the existing disclosure standard: a buyer must prove that a seller had actual knowledge of an undisclosed material defect to successfully pursue the matter in court.
© 2011 Florida Realtors®