Agents are on the Hook!


Today’s real estate market is certainly a seller’s market however, well before a seller can place the “FOR SALE” sign in the front yard, a seller has an obligation to fill out disclosure forms, intended to inform potential buyers of material property defects. If sellers fail to disclose known material defects, there can be a hefty price to pay.

Martha has lived in her home for years and now she’s ready to put her home on the market. Martha connects with Agent John, and together they fill out forms regarding the sale of Seller’s home. Martha and Agent John are aware that the roof needs major repair, the home has faulty electrical wiring, and the home has severe plumbing issues. Agent John urges Martha not to disclose these defects, so together they keep quiet and move forward with the sale. Within no time, Buyer comes along and the home is placed under contract. Soon after buyer moves in, Buyer discovers the significant property defects and files suit against Seller and Agent John. Can the suit be dismissed simply because Buyer failed to do their due diligence and get a home inspection? No!

It is very important for sellers and agents to understand that before a home inspection is completed, sellers and agents must disclose all known material property defects. From the scenario above, please note that a failure to do so could result in a seller and agent having to defend a costly lawsuit brought by the buyer.

What are Material Defects? Material defects are those matters that have a significant, adverse impact on the value of the home, or those matters that pose a risk to one’s health. Common examples of material defects in Florida include: foundation cracks, leaking roof or ceiling, wood-destroying organisms, flood damage, and known toxic conditions such as mold, lead paint, and asbestos.

If a seller fails to disclose known material defects, the buyer can:

1. back out of the contract;
2. file a claim for fraud; and
3. sue the seller for damages

But wait…I’m the agent. How can I be held liable? Much like sellers, licensed real estate agents have a duty to fully disclose all information that could affect a buyer’s decision to purchase the property. If agents know about material defects and decide to keep quiet, agents can be held liable for:

1. nondisclosure and
2. misrepresentation

The buyer can also sue the agent for damages and the realtor’s license could be placed in jeopardy.

It is also important to note that oftentimes, agents complete disclosure forms for sellers. This should not be done. Agents should, however, make sure that sellers are filling out these forms truthfully and accurately.

If you have any questions or concerns about disclosure duties/obligations, please reach out to your trusted real estate attorney for legal advice.


Tamara Williams, Esq.
Berlin Patten Ebling, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

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