When selling real estate in our state, sellers have a legal duty to disclose certain material facts about their property. Proper disclosure protects both buyers and sellers by reducing misunderstandings and potential lawsuits.
Residential real estate disclosures
In Florida, residential sellers must disclose known defects that materially affect property value or safety. This requirement originated from the landmark Florida Supreme Court case Johnson v. Davis. Sellers must inform buyers of defects not obvious upon casual inspection.
What are the mandatory disclosures?
Disclosure of latent defects is required. Hidden issues such as roof leaks, foundation problems, mold and plumbing issues. Known radon gas must be disclosed as well. Sellers must provide a specific written statement regarding radon gas, per Florida Statutes, Section 404.056(5). If there are HOA rules, membership requirements and related fees, these too must be disclosed under Florida Statutes, Section 720.401.
If there is lead-based paint, it must be disclosed. Federal law requires disclosures for homes built before 1978 due to lead paint hazards. Finally, if the home is on the coast, the coastal property risks are mandatory disclosures too. If a property sits near the coast, disclosure of erosion risks and related regulations is mandatory, per Florida Statutes, Section 161.57.
Commercial real estate disclosures
Commercial transactions involve fewer mandated disclosures, but sellers must still disclose known significant issues affecting property value or usability. Federal laws, including lead paint rules, may also apply depending on property use and age.
Consequences of failing to disclose
Failing to comply with disclosure laws can lead to serious repercussions. This includes legal liability. Buyers can sue sellers for fraud, breach of contract or rescission (canceling) of the sale. There are also potential financial penalties. Federal violations, such as lead-based paint disclosures, may result in substantial fines. And, of course, for those in the industry, there is always the risk of reputational damage. Non-compliance can negatively affect a seller’s credibility, complicating future sales.
By understanding and following Florida’s disclosure laws, sellers can help ensure smoother, legally compliant transactions.
