There is virtually no sale that is “as is” in Florida. The Seller and real estate licensee must disclose every fact he/she knows that materially affects the value of the property, whether or not it is readily apparent to the Buyer. Using an As-is Addendum or As-is Contract doesn’t void this responsibility when selling a property. In Florida law, the theory of caveat emptor or “let the buyer beware” is not applicable.

The court case that led to the “Material Defects” disclosure is Johnson v. Davis. This case was ultimately determined by the Florida Supreme Court. This court decision is important not only for property disclosures; but also because Johnson and Davis didn’t close on that sale, the liability arose with the signing of the purchase contract.

What is considered a material defect? Consider the following:

  • The building was constructed in violation of the building code or without a permit.
  • The seller know of a structural problem.
  • The seller fraudulently obtained hazard or flood insurance.
  • There was a misrepresentation as to the property use.
  • There was concealment of a pending foreclosure, eminent domain, lawsuit.
  • There’s something the Buyer can prove that, if known prior to the purchase, would have caused the Buyer to either not make an offer or offer less than they did.

A few exclusions exist to material disclosure. A murder or suicide that occurred on a property is not considered a material fact, and thus does not have to be disclosed. A Seller or real estate license should act with an abundance of caution when faced with such a dilemma. In some cases, the question may be: Does it HAVE to be disclosed, or SHOULD it be disclosed? Another exception to the disclosure rule applies if a Buyer asks whether the Seller or anyone in the property is infected with the HIV virus or diagnosed with AIDS. This is not considered a material defect and can’t by law be disclosed. These persons are protected by the Americans with Disabilities Act.

It is recommended that Seller’s give the Buyer a Property Disclosure Statement prior to the signing of a contract.