What to Include on Florida Sellers Disclosure Form

I’m Eric Lanigan with Lanigan and Lanigan
attorneys in Winter Park Florida. I want to talk for a few minutes about the area of real
estate disclosures and specifically actual knowledge versus what you should have known. Am I only required to disclosed with what
I actually know or am I charged with knowledge of what I reasonably should have known? Now generally the law judges someone by what
they reasonably should know. In other words you can’t turn a blind eye to what’s going
around you. However, at least in Florida, the real estate decisions have taken a more
conservative approach. Actual knowledge of a defect is actually required.
The leading case in Florida is a case called Jensen vs. Bailey and in this case renovations
on a house were done by a contractor and they were not done to code. The buyer ended up
suing the seller when they found out several different rooms had been renovated and there
were several building code violations and the repairs were going to be extensive. And although the seller claimed to have had
no actual knowledge, the trial court held that they either should have known of these
defects or that they had constructive knowledge of the defects. Now constructive knowledge
in the law is where the law charges you with knowing something even though you dont
actually know it. For example in the corporate word, corporate
officers are deemed to have constructive knowledge of what other corporate officers know. So
a president of a corporation can’t say well gee I never knew that but all the vice presidents
knew it and the secretary of the corporation and the corporate financial officer knew it.
If it’s known by other corporate officers then he’s deemed to know it to have constructive
knowledge of it. So the trial court said that the homeowner
was liable. The case went up on appeal. The appellate court reversed and said that you
must have actual knowledge of the defect. No constructive knowledge, no should have
known through reasonable care. Now homeowners beware because the law is also
that a jury can determine through circumstantial evidence that you did actually know regardless
of what you say. For instance in that Jensen case, if the evidence had been if the seller
had actually helped with the work, that the seller had handled the permitting on the job
or that the seller was very knowledgeable in construction methods then a jury could
say through that circumstantial evidence that we find that he did have actual knowledge. And generally speaking always keep in mind
in these kinds of buyer versus seller cases, in my experience the sympathy is generally
with the buyer not with the seller. I think the bottom line is this if you know of a problem
or you have a pretty good suspicion that there is one make the disclosure. What you might
lose in a lower selling price I can guarantee you will be nothing compared to the cost of
litigation. Again I’m Eric Lanigan with Lanigan and
Lanigan attorneys, Winter Park, Florida.

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