In Florida, a seller of residential real property has an affirmative duty to disclose certain defects to a buyer. A claim for failure to disclose (often called a Johnson v. Davis claim) is a well-established cause of action under Florida law and may be asserted as an independent claim or alongside claims for fraud, fraudulent concealment, negligent misrepresentation, or breach of contract, depending on the facts.
The Governing Rule
The Florida Supreme Court established the rule in Johnson v. Davis:
A seller of residential real property has a duty to disclose to the buyer facts materially affecting the value of the property that are not readily observable and are not known to the buyer.
This duty exists even if the sales contract contains an "as-is" clause. An "as-is" provision generally does not protect a seller who fraudulently conceals or fails to disclose known latent defects.
Elements the Buyer Must Prove
The buyer bears the burden of proving each element by the greater weight (preponderance) of the evidence.
Generally, the buyer must establish:
1. The seller knew of the defect.
The buyer must prove actual knowledge of the condition.
Examples include:
- Prior water intrusion
- Roof leaks
- Foundation settlement
- Mold
- Plumbing failures
- Electrical hazards
- Structural movement
- Termite damage
- Sinkhole activity
- Illegal additions
- Environmental contamination
Evidence may include:
- repair invoices
- insurance claims
- contractor estimates
- emails
- text messages
- HOA complaints
- photographs
- neighbor testimony
- prior buyer inspections
- permits
- code enforcement files
2. The defect materially affected the value of the property.
A defect is material if a reasonable buyer would consider it important when deciding whether to purchase or determining the purchase price.
Examples:
- chronic roof leaks
- recurring flooding
- defective seawall
- unstable foundation
- hidden mold
- failing septic system
- significant plumbing defects
- undisclosed code violations
Minor cosmetic issues generally are not material.
3. The defect was not readily observable.
Florida protects buyers only from latent defects, not obvious conditions.
Examples of latent defects:
- water intrusion hidden behind drywall
- concealed mold
- underground plumbing leaks
- hidden termite damage
- concealed structural cracks
Examples of patent defects:
- cracked windows
- missing shingles visible from outside
- broken doors
- obvious drywall damage
If the defect would have been discovered through ordinary observation, the claim is much more difficult.
4. The buyer did not know of the defect.
The buyer cannot recover for defects:
- disclosed in writing,
- revealed during inspection,
- personally observed,
- or otherwise known before closing.
5. The seller failed to disclose the defect.
The omission itself creates liability.
Unlike common-law fraud, a Johnson claim does not always require proof that the seller intended to deceive. However, if the buyer also alleges fraudulent concealment or fraud, intent becomes an element of those claims.
6. The buyer suffered damages.
Typical damages include:
- repair costs
- diminution in market value
- remediation expenses
- temporary housing
- mold remediation
- engineering costs
- attorney's fees (only if authorized by statute or contract)
- consequential damages where legally recoverable
Burden of Proof
The standard burden is:
Preponderance of the evidence (greater weight of the evidence).
If the buyer asserts common-law fraud or fraudulent concealment, the same civil burden generally applies in Florida, although fraud claims require proof of additional elements such as intent and reliance.
Typical Litigation Process
1. Investigation
Buyer gathers evidence, including:
- inspection reports
- repair estimates
- photographs
- seller disclosures
- MLS listing
- emails
- text messages
- permits
- contractor opinions
2. Filing the Complaint
The complaint typically alleges one or more counts:
- Failure to Disclose (Johnson)
- Fraudulent Concealment
- Fraud
- Negligent Misrepresentation
- Breach of Contract
- Violation of an express warranty (if applicable)
3. Discovery
Discovery is often critical because the buyer must prove the seller's knowledge. Common discovery includes:
Requests for Production
- repair invoices
- insurance claims
- contractor correspondence
- photographs
- permits
- emails
- text messages
- HOA communications
- warranties
Interrogatories
Examples include:
- When did you first learn of the defect?
- Who repaired it?
- What complaints did you receive?
- What insurance claims were made?
- What contractors inspected the property?
Depositions
Key witnesses may include:
- seller
- listing agent
- contractors
- neighbors
- home inspector
- engineers
- prior purchasers
4. Expert Witnesses
Experts often determine the outcome.
Typical experts include:
- structural engineers
- roofing experts
- mold specialists
- geotechnical engineers
- contractors
- appraisers
They address:
- age of damage
- cause
- whether repairs were cosmetic
- whether seller likely knew
- repair costs
- diminished value
5. Summary Judgment
If material facts remain disputed, particularly regarding the seller's knowledge or whether the defect was latent, summary judgment is often denied, and the case proceeds to trial.
6. Trial
The buyer must persuade the factfinder that:
- the seller knew,
- the defect was material,
- it was latent,
- it was undisclosed,
- and the buyer suffered damages.
Common Seller Defenses
A seller may argue:
- the defect was disclosed;
- the buyer knew of the condition;
- the defect was obvious;
- the defect arose after closing;
- the seller lacked actual knowledge;
- the buyer waived the claim;
- the buyer failed to mitigate damages;
- the damages are overstated or unrelated.
Evidence That Often Determines the Case
Strong evidence of seller knowledge includes:
- prior insurance claims;
- repeated repair attempts;
- invoices predating the sale;
- contractor testimony;
- emails discussing the defect;
- photographs showing recurring conditions;
- HOA violation notices;
- municipal code enforcement records;
- prior inspection reports;
- seller admissions.
Available Remedies
Depending on the claims proven, a buyer may seek:
- Compensatory damages (repair costs, diminution in value, and other recoverable losses).
- Rescission of the purchase contract in appropriate circumstances, particularly where the nondisclosure was material and equitable relief is warranted.
- Punitive damages if an independent fraud claim is proven and the statutory requirements for punitive damages are satisfied.
- Prejudgment interest on liquidated damages where applicable.
- Attorney's fees only when authorized by contract or statute; Florida generally follows the "American Rule," under which each party bears its own fees absent such authorization.
Practical Considerations
Because a seller's actual knowledge is frequently the central issue, these cases often turn on discovery. A buyer's strongest cases typically involve evidence that the seller experienced recurring problems (such as repeated leaks or flooding), attempted repairs before listing the property, made insurance claims, or communicated about the defect with contractors or others before closing.
Contact the Violette Law Firm to address all of your Failure to Disclose Property Defect concerns.