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New CaseLaw on Comparative Negligence on Seller's Duty to Disclose Material Facts

By: Grace Anne Glavin, Esquire

A new court case decided in United States District Court (federal court) for the Middle District of Florida (including all of Central Florida) tells us about a homebuyers who sued their seller and also the seller’s listing real estate agent when after the closing the homebuyers learned that their home had been built pursuant to a variance that prevented them from expanding their home beyond 2,000 square feet if they wished to. The lawsuit claimed that the seller and the listing realtor refused to disclose the variance. Warfield v. Stewart, ___F.Supp.2d___(July 2, 2009) (M.D., Fla. 2009)

The traditional doctrine to “Caveat Emptor” (Buyer Beware) was eroded by a string of Florida cases culminating in the necessity for disclosure announced by the Florida Supreme Court in Johnson v. Davis, So.2d 625 (Fla. 1985). We were thence taught that where the seller of a home has knowledge of conditions materially affecting the value of the home but which conditions are not readily observable (hidden) and which are not known to the buyer, the seller is under duty to disclose.

Further cases has developed the law regarding “comparative negligence”, like in multiple car automobile cases, where in the buyer cannot hide behind the unintentional negligence of the seller who misrepresents where the buyer is likewise negligence in failing to discover the error. These new comparative negligence cases in real estate disclosure law teach us that the jury as the ultimate “finder of fact” should way all of the circumstances to determine the percentage to which the seller or the buyer or the real estate agents are accountable.

Warfield v. Stewart, our new Central Florida case, said that the buyers, who were sophisticated in real estate zoning and permitting matters, may have been negligent in discovering the variance by their own review, but that the jury could assess the comparative negligence of the buyers, the seller and the real estate agents.

Having practiced residential and commercial real estate law for over thirty years, I truly advise all listing agents to encourage their sellers to obtain a thorough home inspection as part of the listing process, as well as all buyers to obtain a similar inspection during their due diligence period. All agents should keep a copy of the written inspection reports in their files to ensure that future defects discovered with not be the subject of negligence litigation.

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