The contract for services between the buyer and inspection company many times is written in a manner that either absolves the inspection company from most liability, or limits the damages to the price of the inspection of itself. This means that the buyer now has to spend money (out-of-pocket) to hire an attorney to sue the seller, on top of potentially fixing the problem in the interim. Choosing a reputable inspection company will save a prudent buyer time, money, and headaches down the road.
Can you briefly explain what the most common cases of fraud or concealment are?
Run-of-the-mill concealment issues can range from mold hidden behind wallpaper to cracked tiles under large area rugs. Many inspection companies are restricted to simply conducting a visual inspection and do not move or touch much of anything for their own liability purposes. It’s really the buyer’s duty to ask the right questions and possibly even “roll up their sleeves” with seller’s permission, of course, and see what’s really going on in areas that may be covered or difficult to reach.
What are one or two key things that not every buyer may know about Florida law on residential real estate transactions in those cases?
Under the seminal Florida case that governs seller disclosures, more specifically fraudulent misrepresentations by sellers, Johnson v. Davis, 480 So. 2d 265 (Fla. 1985), a seller has a duty to disclose to purchaser any known facts materially affecting the value of the property, which are not readily observable and are not known to the purchaser. This means that as a seller you have to truthfully disclose issues that you are aware of that materially affect the property value and that are not discoverable to the buyer simply by nature of being easily observable.
For buyers who wish to bring a claim against a former seller, you must prove:
That the seller knew about the defect.
The defect materially affects your property’s value.
It is not something that you observed, should have easily observed, or that an inspector in fact observed and made you aware of.
How is an “As-Is” sale different when it comes to fraud or concealment?
Just because a contract is an “As-Is” contract, does not obviate Seller of his legal duty to disclose, as required by Johnson v. Davis. During the inspection period, upon discovery of any issue that a buyer is not comfortable with, he may exercise his right to terminate the contract. This is very useful in an “As Is” purchase setting when you, as a buyer, know very little about the condition of the property you are putting an offer on.
What advice would you give people in Florida to help avoid nondisclosure issues before buying a home?
Again, hire an experienced inspector who goes above and beyond the bare minimum. While this person may cost a little more, it will certainly be worth the extra money. Always ask your Realtor to provide you with the seller disclosures as well, and do not hesitate to ask the seller questions and even physically explore things that may not look right.
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