Brokers Beware Of Seller’s Failure To Disclose

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Most real estate agents and brokers are familiar with the seller disclosure requirements imposed by the Florida Supreme Court case Johnson v. Davis, 480 So. 2d 625 (Fla. 1985), and if they are not, they should be. That case held that a seller of residential real estate is required to disclose to a buyer all known facts materially affecting the value of the property which are not readily observable and are not known to the buyer. Johnson, 480 So. 2d at 629.

What many agents and brokers may not be aware of is that the liability for a seller’s nondisclosure may be extended to the broker. In Goodman v. Rose Realty West, Inc., 193 So. 3d 86 (Fla. 4th DCA 2016), a purchaser of real property brought an action for fraudulent nondisclosure against the seller as well as the seller’s agent and broker. The court held that a broker could be liable to a purchaser for any fraudulent nondisclosure by the seller under a theory of agency law.

In other words, when a real estate agent has knowledge of facts materially affecting the value of the property which are not readily observable and are not known to a buyer (i.e., the Johnson v. Davis standard), the duty of disclosure announced in Johnson v. Davis extends to a seller’s real estate broker. Goodman, 193 So. 3d  Any material withholding of information known to the real estate agent done during his or her work as a real estate agent to facilitate a sale, which was in a broker’s interest since it would earn a commission on the sale, could impose liability upon the broker. Goodman, 193 So. 3d at 88. This is so because the broker, as principal of the real estate agent, is civilly liable for the tortious acts of its agent that are within the scope of the agent’s employment, even where the agent’s acts or representations are fraudulent or deceitful. Goodman, 193 So. 3d at 87.

For this and other reasons, if you are a real estate agent or broker, it is important to have a knowledgeable real estate lawyer working for you. Barry Miller Law is familiar with all aspects of real estate law. If you, or someone you know, has legal questions concerning real estate, contact Barry Miller Law for assistance at 407-423-1700 or email us at info@BarryMillerLaw.com.