The Duty Disclose Construction Defects in a Residential Real Estate Transaction

Are thinking of buying or selling a residential property? Have you ever wondered what the law requires the seller to disclose as part of the sale of the home in Florida? The answer is this: If the seller knows of a construction defect or other issue that materially affects the value of the home and which is not open an obvious to the buyer, it must be disclosed as part of the sale of the home.

Disclosure normally occurs when the real estate agent presents a contract for sale to the seller. As part of the paperwork, there is a standard disclosure form for the seller to fill out. This is the seller’s opportunity to disclose issues about the property that require disclosure. Note, however, that the buyer cannot simply turn a blind eye to open and obvious defects.

What about home improvements made by the seller that do not comply with the Florida Building Code? The Second District Court of Appeals took this issue head on in Jensen v. Bailey. The sellers hired various companies to perform significant remodel work to their home. Unfortunately, the companies failed to pull the proper permits and also failed to perform the work in accordance with the Florida Building Code. There were numerous construction defects of which the buyer was unaware until after they had purchased the home.

The buyers sued claiming that the seller should have known the construction companies they hired failed to pull the required permits. The theory was based on the legal requirement under the Florida Building Code that owners ensure that permits are pulled for the work performed. The sellers testified that they had no knowledge that the permits were not obtained and also did not know the Construction violated the Florida Building Code. The trial court accepted and believed their testimony, but nevertheless still held the sellers liable because they had a corresponding duty to ensure and to know whether permits were pulled.

The sellers appealed the trial court’s decision. The appellate court reserved the trial court and held that the seller can only be liable if it is proved that they actually knew no construction permits were pulled. The appellate court was afraid of the slippery slope of when a seller “should have known” about a defect and cautioned against the law requiring sellers to essentially warrant the home’s wellbeing.

The best way to protect oneself against such a situation is to hire a reputable home inspector who is not affiliated with a realtor or any other person with an interest in completing the sale. I would recommend a home inspector who is a licensed general contractor in the State of Florida. Not all home inspectors are licensed general contractors and possess the expertise to identify all construction defects and violations of the Florida Building Code, ASK! The goal of the inspection should not be to green light the sale, but to alert the buyer to each and every potential construction defect present in the residence.

If you need advice concerning your duties and rights as a seller or a buyer and what practical steps you should take to increase your chances of a smooth purchase or sale of a home, contact us. We are located in St. Petersburg and we can help. If you are currently being threatened with a lawsuit or currently in a lawsuit, we can also help. We have experience representing both buyers and sellers in residential and commercial real estate in relation to nondisclosure, construction defects, negligence, code violations, misrepresentation and fraud, broker and agent claims, breach of contract and rescission claims.

If you feel that you have been sold a house with construction defects, you should immediately call Jones Law Group at (727) 571-1333 during regular business hours or (727) 753-8657 on weekends or after regular business hours.

Jones Law Group
5622 Central Avenue
St. Pete, FL 33707