A recurring source of litigation in Florida revolves around the rights of buyers and sellers operating under an “As Is” contract for sale of residential property.
A. The Seller’s Obligations to Disclose Under Florida Law
Despite the existence of contractual language excusing a seller of a property from representations (ie the “AS IS” language), Florida law provides a separate independent duty to disclose material facts that would substantially affect the value of a piece of property. Johnson v. Davis, 480 So.2d 625 (Fla. 1985). Importantly, the test for determining the materiality of a fact in a transaction of this nature is whether the fact “substantially affects the value of the property.” Dorton v. Jensen, 676 So.2d 437 (Fla. 2nd DCA 1996). That means that when a seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer. Johnson, 480 So. 2d at 629. The examples of such factors are endless but often include things like prior insurance claims, roof conditions, floods, construction defects, mold, termites, and septic/sewer system issues. Ultimately, the determination of whether the defect or issue if established is material would be question for the jury. A non-disclosure case requires the Plaintiff to establish the following elements: (more…)