Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789
407-740-7379
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Real Estate
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. Watch the video “What to Include on Florida Sellers Disclosure Form” on the Lanigan & Lanigan YouTube channel. Sellers Disclosure Form: 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 don’t actually know it. Real Estate Constructive Knowledge For example in the corporate world, corporate officers are deemed to...
Real Estate
I’m Eric Lanigan with Lanigan and Lanigan attorneys in Winter Park Florida. I want to talk for a minute today on the subject of real estate disclosures by the seller in the real estate transaction. What Level of Detail Must be Disclosed? And the question I want to pose is, is the tip of the iceberg enough? And what I mean by that is in the seller making a disclosure, is it enough just to identify the problem without giving any details? You may watch the video on this topic called “Florida Real Estate Sellers Disclosure Form Details” on the Lanigan and Lanigan YouTube channel. For example if someone has a disclosure and they say termites. And it says termites reported and pest control company did treatment. That’s the facts out of an actual case. The buyer ended up suing the seller for termite damages. Now you would think, well they made the disclosure but what the evidence later showed is that there had been twelve different discoveries of termite infestation and twelve different termite treatments – all within just the previous five years. So obviously this is a property that’s sitting on top of an ocean of termites. So the problem is far more severe than just, well we had some termites and we called in a termite company and they did the treatment. You Must Reveal the Extent of the Problem So, basically the trial court said that, that was sufficient that they made the disclosure. The appellate court came back and reversed that decision and said you can’t get away with merely disclosing the tip of the iceberg....
Real Estate
Winter Park Florida attorney Eric Lanigan warns Florida homeowners to be aware of possible fraud involving the transfer of property using a fraudulent quit claim deed. What is a Quit Claim Deed? A quit claim deed is a document used to transfer property without the sale of the property. A quit claim deed is often used in divorces when transferring property from one spouse to another, or in cases of someone wishing to transfer ownership of property to another member of the family. In Florida, a quit claim deed must contain a description of the property, and notarized signatures of the person transferring the property and signatures of two disinterested witnesses. Florida statutes are very strict about the type of required identification to prove the identity of the owner’s signature when documents are notarized. How is Fraud Committed? A quit claim deed can be executed fraudulently in several ways. In 2012, the Florida Attorney General’s office filed suit against a group of land trust companies in South Florida. The companies were promising to eliminate underwater mortgages through a very complex scam. The Attorney General’s office ultimately froze all the assets required deeds be signed back over to owners. The elderly are easy targets, especially if living in nursing homes away from close contact with relatives. Some may experience threats that care will be withheld unless property is transferred to the caretaker. In other cases, the elderly may fall prey to those who advise them that signing over the deed via quit claim deed is a wise investment or may help their families in the event of their death. In...
Real Estate
This is Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. In this final part of the series on buyers’ questions about the property disclosure form, I want to talk about legal remedies if you discover an undisclosed defect with the home. Should I Make Repairs or Wait? Q: What about the house. I have a leaking home and I don’t have money to pay for it right now. Do I take out a loan and hope the lawsuit goes through? Well you’re really talking about your own personal economics at this point. Obviously, if you’re sustaining water damage, it’s going to get worse over time. And the seller is going to take the position well when I left, the problem was only so bad and because you let it go and didn’t get it fixed you know now it’s twice as bad, now it’s five times as bad whatever the case may be and therefore this extra damage is your own fault. And frankly if I’m representing the seller I’m certainly going to try to use that defense. That you failed to mitigate damages. Everybody in every kind of lawsuit, has a duty to mitigate their damages. You can’t just say well, this is just going to get worse and worse and worse but so what I’m ultimately going to collect the money from the other side. So it really doesn’t matter. The law doesn’t allow you to do that. You must make reasonable effort to keep the damages from getting worse than they currently are. Now you get into the situation about impossibility. I bought...
Real Estate
I’m Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. In part 2 of this series on the questions buyers have on the property disclosure form, I will answer some questions about liability when defects are not disclosed. Who Has Liability? Q: Can I sue the selling realtor, my realtor, the seller and the inspector? I’ve mentioned several times in these answers the phrase ‘knew or should have known’. On any of those parties the realtor, whether it’s the seller’s realtor, the buyers realtor, the seller, the inspector, if you can establish if any of those parties knew or should have known about the problem then there’s potential liability against that person. I recently had a case and contacted by the seller who told me about the problem they had had in the house and now they were getting letters from the buyer’s attorney saying that this problem had been discovered and they wanted rescission, damages and anything they could get. In talking with the seller of the property I discovered that he had advised his realtor of the problem and essentially did so because the question was, does this need to be disclosed? And he told the realtor what the problem was, showed the realtor the problem. The realtor made the decision that this was only a temporary thing and that it was being repaired and therefore would not be a problem. Well it turned out to be not temporary and whatever was being done was not repairing the problem. What I said to the seller in that point is there is somebody liable to the...
Real Estate
I’m Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. In the first series of questions about the seller’s property disclosure form, I answered questions from the seller’s perspective. In this series, I will answer questions asked by buyers concerning problems that were or were not disclosed in the property disclosure form. Lawsuits Can Result if Property Defects are not Disclosed Q: What can I do if the seller didn’t disclose a very obvious problem like a leak that caused rain to pour through the roof or if they patched a hole or problem and I subsequently find the problem and the resulting damages? Well the seller has made a huge mistake and we see this all the time. From the seller’s perspective, a little caulk, a little fresh paint a couple of patches on a roof that is obviously shot. All they’re doing is buying themselves a much bigger problem down the road. Because I can tell you from experience the very first jury trial I ever did 35 years ago was defending the realtor in a situation where the home had been purchased. Several months after buying the house, the new owner decided to take out a wall they pulled up the drywall and are immediately inundated with a massive swarm of termites that are in the process of eating his whole house. And the lawsuit was then against the seller, the realtor, the home inspector all on the basis that they knew or should have known that this problem existed. Now in representing the realtor, I probably had the easiest defense in that I...
Real Estate
I’m Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. In this final series on the seller’s property disclosure form, I will explain the seller’s liability for nondisclosure and what, if any, liability the home inspector has. Liability and Damages Related to Seller’s Disclosure Q: Can I be sued and have the home sale cancelled or will there be a lawsuit against me for damages? That goes to the issue of damages versus rescission. Rescission – put everybody back where they were before the deal was made – is going to require fraud in the inducement. And fraud is the intentional misrepresentation of fact or the intentional omission of material facts that induced the buyer into buying the property. In that type of situation, rescission is a potential or alternative remedy. Generally, the lawsuit will be for damages. What’s going to be the cost of repair or what is the diminished value of the property? Because you may get something that a repair is not going to put the property in the same position as it would be if the damage didn’t exist and in Florida probably the number one example of that is sinkholes. There are many people in the engineering field who will tell you that there really is no such thing as a guaranteed fool proof sinkhole repair and I think almost any realtor will tell you that once a property has sinkhole damages it is the property equivalent of a leper. Nobody’s going to get anywhere near it. They’re going to immediately going to say drive on I don’t want anything to do...
Real Estate
I’m Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. As we continue this series on the seller’s property disclosure form, I will answer a seller’s question about the legal remedies the buyer has if the seller fails to disclose a problem with the home. Non-disclosure May Result in Legal Action Q: What legal options does the buyer have against me if I didn’t disclose a problem? Well that gets back to the answer to the original question. From a practical standpoint, it’s going to depend upon the significance of the problem but in a purely technical standpoint what are his legal options? His legal options are to make a claim against you as the seller, the realtor, the home inspector claiming that any or all of you knew or should have known that the problem existed. Those are his options. And most of them will try to get a resolution without going to court and in many cases if that can be done it’s certainly the recommended course of action because obviously if it gets into litigation it’s going to get very expensive for everybody. I had a case recently just in the past couple of weeks where someone contacted me and they were the seller of property and it was a condominium a high rise on the beach and after the people moved in, they moved in they found water damage the padding under the carpet in one of the rooms was wet when they took it out to replace the carpeting, etc. And they were in that case demanding rescission of the contract and...
Real Estate
I’m Eric Lanigan of Lanigan and Lanigan attorneys in Winter Park, Florida. Today I am going to answer some of the most frequently asked questions sellers have about the seller’s property disclosure form and the role of the inspector when selling a home. Sellers Should Disclose Everything Q: From the seller’s perspective, what happens if I purposely don’t disclose a problem with the home? Then you have a real problem. And non-disclosure is the number one reason why buyers of homes end up suing the sellers of homes. Now, at what level do you have to disclose a problem? Generally, the law will say that the problem needs to be substantial in nature such that it materially affects the value of the property or will involve a significant cost of repair. So, if you have a door that has a broken lock and you don’t disclose it, is that going to be a problem? No. If you’ve got known termite damage, known sinkhole damage, known black mold problems and you don’t disclose it then you’ve just bought yourself a much bigger problem because the buyer will inevitably find that problem and you’re going to get sued. Home Inspectors Do Not Always Find Everything Q: What happens if there’s a problem that comes up that I had no idea was wrong because I had a home inspection that didn’t disclose the problem? Well, you can only be liable for non-disclosure in the event there is either a negligent or an intentional misrepresentation. And a misrepresentation can occur by what you don’t tell just as it can occur by misrepresenting what...
Real Estate
When contemplating any real estate transaction, you should be extremely cautious with whom you conduct business to avoid potential real estate scams. Be especially cautious before considering dealing with people online that you do not know. It is important to work with only credible and ethical businesses when conducting real estate transactions. Distressed Property Scams Disreputable people often target individuals in the middle of a stressful short sale, foreclosure or bankruptcy. These individuals may ask you to sign over the title of your home as part of the ‘process’. Some property owners have been convinced to sign their title over to someone else who wants to help you stay in your home. They may make promises to pay the mortgage payments while allowing you to stay in your home by renting from them. The homeowner may not have been aware that even if he/she signs the title over, they are still responsible for the outstanding mortgage on the property. Renters Are Subject to Scams Too Ad Hijacking There has been a wave of what is being termed ‘ad hijacking’. Scammers find actual property listed for sale on legitimate websites, copy the photographs and property descriptions and post the property for rent –often on Craigslist.org. The scammer provides an email address purporting to the owner. What the Scam Does These scammers usually ask the applicant to wire money for the deposit with the promise they will get the key upon receipt of the deposit. The applicant may wire the money thinking they have found a great deal and the key never comes. In addition, the scammer may send a rental...
