Residential Real Estate Fraud Claims

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Residential Real Estate Fraud Claims

You found a home. It has everything you want. It’s the right size. It’s the right square footage. It’s the right number of bedrooms. It’s the right number of bathrooms. It’s the right size yard. It’s in the right school district. It’s in the right neighborhood. It’s just right — or so you think.

Everything you see looks good. Everything you know sounds good. It was meant to be your home. Everything looks good on paper, and everything looks good in person. You have seen and read the written Seller’s Property Disclosure regarding the home. The sellers don’t disclose any noteworthy problems or issues with the home. All looks good — or so you think.

You make an offer. It’s more than you want to pay, but you’re worried someone else might out-bid you. Money will be tight, but you have to have that home. The sellers accept. You have a home inspection that also doesn’t reveal any major problems. You close on the purchase of your dream home. The keys are yours. The home is yours. It’s one of the happiest days of your life — or so you think.

Some say you never really know someone until you live with them. Same thing could be said for a home. You never really know a home until you’ve lived there.

All you see prior to moving in has been the anticipated bliss of home ownership. As the saying goes, ignorance is bliss. What about what you don’t know? What about what you can’t see? Did the sellers tell you everything they know about the house? Did the sellers tell you about the hidden damage to the home the sellers knew about? Did the sellers tell you about the hidden defects in the house the sellers knew about? Did the sellers keep secrets about the home? What’s hidden behind the walls of the home? What’s hidden beneath the house? Did the sellers cover anything up? Is that fresh coat of paint hiding odors or stains? What’s under that new carpet or flooring?

When it comes to selling a house, full disclosure is the best disclosure. Full disclosure is the correct disclosure. Sellers want to sell their house, and they want to sell it quickly. Sellers also want to sell their house for as much as possible. Sometimes these objectives of home sellers cause them to step across a forbidden line: the line between truth and fraud.

Lying, cheating and stealing is wrong. Home sellers who fail to disclose the problems with the home that materially affect the value of the home are effectively stealing from the home purchasers. What home sellers say can and will be used against them. What home sellers don’t say can and will be used against them. When it comes to information that might materially affect the value of a home for sale, half-truths aren’t good enough. Only the full-truth will satisfy the seller’s burden of disclosure to an innocent, unsuspecting home buyer. Only the complete truth will set the sellers of a home free from potential liability to the home purchasers for fraud or misrepresentation.

Fraud in residential real estate transactions happens, and it happens every day. Money and greed drive fraud. It can be emotionally devastating and financially catastrophic when fraud is driven right into your newly purchased home.

No matter how nice the sellers might seem, home sellers are people subject to monetary temptations and self-serving greed. Many sellers know their home has problems, and there’s no problem if those sellers fully disclose those problems to potential purchasers. However, many sellers are concerned that no one would want to buy their home and their home’s problems if they knew about them, so the sellers hide and conceal the problems with the home. Well, that’s a problem: not just morally, but legally.

The Florida Supreme Court stated the now well-settled standard “that where the 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. This duty is equally applicable to all forms of real property, new and used.” Johnson v. Davis, 480 So. 2d 625, 629 (Fla. 1985). Strikingly, many Seller’s Property Disclosure forms specifically refer to Johnson v. Davis, and here is one example:
Notice to Seller: Florida law [citing Johnson v. Davis] requires a seller of a home to disclose to the buyer all known facts that materially affect the value of the property being sold and that are not readily observable or known by the buyer. This disclosure form is designed to help you comply with the law. However, this disclosure form may not address every significant issue that is unique to the Property. You should think about what you would want to know if you were buying the Property today; and if you need more space for additional information, comments or explanations, check the Paragraph 10 checkbox and attach an addendum.

Despite this specific type of notice and directive to sellers explicitly set forth in the Seller’s Property Disclosure form, many sellers will still fail to disclose problems with the property they are selling, take the buyers’ money and leave the buyers with a home full of financial and emotional heartache.

Guilty home sellers many times try to claim innocence and cast blame on the homebuyers. Sellers many times claim that the buyers had an opportunity to inspect and it’s the buyers’ fault if the homebuyers didn’t discover the hidden home problems. Under Florida law, home sellers are not rewarded for successfully and knowingly concealing materially adverse conditions or materially adverse information regarding the home from potential purchasers. Florida home sellers can be held legally liable and legally accountable for intentional or negligent concealment of known problems with the home they are selling.

Home sellers will also many times mistakenly try to rely on the fact that the Real Estate Purchase and Sale Contract explicitly says it is an “As-Is” contract. Simply because a real estate contract is an “As-Is” contract that does not give the home sellers free rein to lie and to fail to disclose problems with the home. “An ‘as is’ clause in a contract for the sale of residential real property does not waive the duty imposed by Johnson v. Davis to disclose hidden defects in the property.” Syvrud v. Today Real Estate. Inc., 858 So. 2d 1125, 1130 (Fla. 2d DCA 2003). Even if a contract to sell is an “as-is” contract, the home sellers still are legally required to disclose known problems with the home that could materially affect the value of the home. Many common conditions that home sellers try to hide from homebuyers include, among others, the following:

  • Water intrusion issues
  • Flooding damage
  • Plumbing problems
  • Septic tank issues
  • Drain field issues
  • Well issues
  • Pool, hot tub or spa issues
  • Pipe leaks or air conditioning leaks
  • Mold issues
  • Environmental issues
  • Roofing issues
  • Foundation issues
  • Settlement issues
  • Sinkhole issues
  • Electrical issues
  • Fire Damage
  • Smoke damage
  • Termite damage
  • Chinese drywall
  • Home built on buried garbage landfill
  • Location of murder, suicide or other disturbing crime
  • Boundary dispute
  • Homeowners association issues

If you have purchased a home and have discovered major problems with the home you believe the sellers knew about but failed to disclose, you might have legal recourse against the sellers. The trial attorneys at Burnett Law, P.A., have extensive experience in representing homeowners who have been defrauded in purchasing a home.

If you have purchased a home and learned of undisclosed problems with the home that you believe materially adversely affect the value of the home, contact Burnett Law, P.A., at 813-221-5000 for a FREE CONSULTATION.