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1. The seller of a home must have knowledge of a defect in the property;
2. The defect must materially affect the value of the property;
3. The defect must be not readily observable and must be unknown to the buyer; and
4. The buyer must establish that the seller failed to disclose the defect to the buyer.”

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1. The seller of a home must have knowledge of a defect in the property;
2. The defect must materially affect the value of the property;
3. The defect must be not readily observable and must be unknown to the buyer; and
4. The buyer must establish that the seller failed to disclose the defect to the buyer.”

Sage v. Pahlavi, 358 So. 3d 434, 436 (Fla. 4th DCA 2023).

Very few courts outline the elements of a cause of action for Fraudulent Nondisclosure with Real Estate Transactions. As a result, below you will find those cases that do and those cases that provide a robust discussion of the claim.

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FLORIDA STATE COURTS

Florida Supreme Court:  Johnson v. Davis, 480 So. 2d 625, 628 (Fla. 1985) (discussing the cause of action).

First District: Haskell Co. v. Lane Co., Ltd., 612 So. 2d 669, 671 (Fla. 1st DCA 1993) (discussing the cause of action); Rayner v. Wise Realty Co. of Tallahassee, 504 So. 2d 1361, 1363-64 (Fla. 1st DCA 1987) (discussing the cause of action).

Second District: Jensen v. Bailey, 76 So. 3d 980, 983 (Fla. 2d DCA 2011) (listing the elements).

Fourth District: Sage v. Pahlavi, 358 So. 3d 434, 436 (Fla. 4th DCA 2023) (listing the elements); Solorzano v. First Union Mortg. Corp., 896 So. 2d 847, 849 (Fla. 4th DCA 2005) (discussing the cause of action);

Fifth District: Perrelli v. Failla, 293 So. 3d 36, 37-38 (Fla. 5th DCA 2020) (discussing the cause of action).

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2 Defenses to Claim for Fraudulent Nondisclosure with Real Estate Transactions

(1) R. Civ. P. 1.110(d) (pleading affirmative defenses), and other standard defenses. See § 1.

(2) Statute of Limitations: 95.11(3)(j), Fla. Stat. (four years).

(3) “[T]o hold the seller liable under Johnson, the buyer must prove the seller’s actual knowledge of an undisclosed material defect.” Eiman v. Sullivan, 173 So. 3d 994, 997 (Fla. 2d DCA 2015) (citing, Jensen v. Bailey, 76 So.3d 980, 983 (Fla. 2d DCA 2011))(emphasis added).

(4) A Fraudulent Nondisclosure with Real Estate Transactions claim does not apply to commercial transactions. Futura Realty v. Lone Star Bldg. Ctrs. (E.), Inc., 578 So. 2d 363, 364-65 (Fla. 3d DCA 1991).

(5) To be successful in a Fraudulent Nondisclosure with Real Estate Transactions claim the nondisclosure needs to be of a physical defect present in the property that was sold. Azam v. M/I Schottenstein Homes, Inc., 761 So. 2d 1195, 1196 (Fla. 4th DCA 2000).

(6) The elements of a Fraudulent Nondisclosure with Real Estate Transactions claim do not make the seller of the house a guarantor of the property’s conditions. Is needed evidence that the seller knew of the conditions affecting the house. Brown v. Carter, 13 So. 3d 111, 114 (Fla. 2d DCA 2009); Slitor v. Elias, 544 So. 2d 255, 258-59 (Fla. 2d DCA 1989).

(7) A Fraudulent Nondisclosure with Real Estate Transactions claim applies only “[t]o sellers, those in privity with the buyer, individuals acting as agents on behalf of the seller (e.g., a real estate broker or closing agent), or those who have a fiduciary or some other special relationship with the buyer.” Virgilio v. Ryland Grp., Inc., 695 F. Supp. 2d 1276, 1283 (M.D. Fla. 2010)(emphasis added).

(8) A buyer may not prevail in a claim when the house conditions “were readily observable and/or within the buyer’s ability to know or easily discover.” Diaz v. Kosch, 250 So. 3d 156, 166 (Fla. 3d DCA 2018) (citing Pressman v. Wolf, 732 So. 2d 356, 362 (Fla. 3d DCA 1999))(emphasis added).

(9) “Absent an express agreement, a material misrepresentation or active concealment of a material fact, the seller cannot be held liable for any harm sustained by the buyer or others as the result of a defect existing at the time of the sale.” Haskell Co. v. Lane Co., Ltd., 612 So. 2d 669, 671 (Fla. 1st DCA 1993)(emphasis added).

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