What Happens If I Fail to Disclose a Known Defect in Florida?
Failing to disclose a known material defect in Florida can result in contract rescission, a lawsuit for damages, and potential fraud claims. Here is what the law requires, what the consequences are, and how to protect yourself.
What Happens If I Fail to Disclose a Known Defect in Florida?
Florida's disclosure law is clear: sellers must disclose known material defects that are not readily observable by the buyer. Failing to do so can have serious legal and financial consequences — both before and after closing.
This post is for general informational purposes only and does not constitute legal advice.
Florida's Disclosure Standard
The Florida Supreme Court established the seller disclosure standard in Johnson v. Davis (1985): sellers must disclose facts that:
- Materially affect the value of the property
- Are not readily observable by the buyer
- Are known to the seller
This is an affirmative obligation — sellers must volunteer known material defects, not just answer questions honestly. The standard applies regardless of whether the property is sold as-is.
Consequences Before Closing
If a buyer discovers an undisclosed defect before closing — typically through the inspection or their own due diligence — they may:
Cancel the contract and recover their earnest money. If the defect is material and was not disclosed, the buyer has grounds to cancel and receive a full refund of their deposit.
Demand a price reduction or seller credit. The buyer may choose to proceed but demand compensation for the undisclosed defect.
Pursue legal action. In egregious cases, the buyer may pursue legal action even before closing.
Consequences After Closing
If a buyer discovers an undisclosed defect after closing, they may:
Sue for damages. The buyer can sue the seller for the cost of repairing the defect, any diminution in the property's value, and consequential damages.
Seek rescission. In serious cases, the buyer may seek to rescind the transaction — essentially unwinding the sale.
Assert fraud claims. If the seller intentionally concealed a known defect, the buyer may assert fraud claims, which can result in punitive damages in addition to compensatory damages.
File a complaint with the Florida Real Estate Commission. If a licensed real estate agent was involved in the non-disclosure, the buyer can file a complaint with the FREC.
The Statute of Limitations
In Florida, the statute of limitations for a non-disclosure claim is generally 4 years from the date the buyer discovered or should have discovered the defect. This means a seller can face a lawsuit years after closing.
How to Protect Yourself
Disclose everything you know. The only complete protection against a non-disclosure claim is full, accurate disclosure.
Get a pre-listing inspection. A pre-listing inspection identifies conditions you may not be aware of, giving you the opportunity to disclose them or address them before listing.
Keep documentation. Keep records of all repairs, inspections, and disclosures. If a dispute arises after closing, documentation of what you knew and disclosed is your best defense.
Consult a real estate attorney. If you are uncertain about your disclosure obligations for a specific condition, consult a Florida real estate attorney before listing.
FAQ
Does selling as-is protect me from disclosure liability?
No. Selling as-is means you are not agreeing to make repairs — it does not change your obligation to disclose known material defects.
What if the buyer had an inspection and the inspector missed the defect?
The buyer's inspection does not relieve you of your disclosure obligation. If you knew about the defect and did not disclose it, you can still be held liable even if the buyer's inspector missed it.
How long after closing can a buyer sue me for non-disclosure in Florida?
Generally 4 years from the date the buyer discovered or should have discovered the defect.
Questions about your disclosure obligations for your Emerald Coast property? I can walk you through the requirements and connect you with a real estate attorney if needed.
— Kinsey Haddock P.A., Broker Associate | Coldwell Banker Realty — Panhandle | License #BK3253849
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Written by
Kinsey Haddock P.A.Kinsey Haddock P.A. is a Broker Associate and REALTOR® with Coldwell Banker Realty, specializing in coastal real estate across the entire Florida Panhandle — from St. George Island and the Forgotten Coast to Panama City Beach, Scenic Highway 30A, and Destin.