When in Doubt, Shout it Out: Disclosure of Defects in Residential Resales

How many times have you looked around your home and thought, “Wow, that stain on the ceiling is huge. I need to fix that water leak.”

How about, “I’m so glad those termites haven’t come back.” Or, have you moved that potted plant to cover the water stain that seeped up through the hardwood floor?

While these are things we’ve probably all done or thought at one point or another, these instances can have big effects if not properly disclosed during the sale of your home.

Even something as minuscule as a bump in the floor can signify a larger structural issue and cause you a massive headache months or years after the sale of your property. Sometimes there can be confusion about which defects warrant disclosure.

In Florida, disclosure is required for all known material defects affecting the value of the property. Luckily, a “material defect” is fairly easy to spot—they are those visible to the eye. Given this broad definition, any material defects known to the seller must be disclosed to the buyer (for example, that annoying water leak in the ceiling).

Of course, these issues are not surprises to most potential buyers because they are visible to the eye. Even so, sellers should tell the truth when asked about visible material defects because lying about, or minimizing the extent of, a defect, can open the seller to liability for nondisclosure in the future.

Aside from material defects visible to the eye, sellers also have to disclose the existence of non-apparent defects (like that water stain under the plant).

Remember, any defect affecting the value of the property needs to be disclosed to potential buyers. Also, be sure to avoid withholding information from buyers when responding to questions about potential defects.

Even if you had your home treated for termites last year, and have had no active infestations since, you must still disclose the existence of the prior termite issue to avoid being saddled with liability down the road.

There are, however, certain classes of defects deemed nonmaterial by statute, even though their existence can have a major impact on the perceived value of the property.

Under Florida law, whether the property was the actual site, or even a suspected site, of a homicide, suicide, or death, it need not be disclosed to potential buyers.

The Charles Mansons of the world can relax since they won’t have to confess their gory misdeeds to potential buyers – they just shouldn’t expect the court of public opinion to be so kind. Also included in the nonmaterial-by-statute category is whether someone living in the property is infected with AIDS.

In sum, it is important to accurately and completely disclose to all potential buyers any defects visible to others, and those secret gems hidden under pots, rugs, and couches.

Most defects can be cured during the inspection period outlined in the purchase contract and will not derail a closing. Plus, it is better to sell your home without the specter of a future lawsuit looming over your head. (And as for specters, ghouls, and goblins – their existence does not have to be disclosed either, at least under a strict reading of Florida law.)

When in doubt, a good rule to live by is disclose, disclose, disclose.

The law regarding identification and disclosure of defects can be confusing, especially when it comes to those that appear to be mainly cosmetic in nature. The advice of a knowledgeable attorney can help you navigate the law regarding disclosure issues.

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This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.

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