Posted By Larry Tolchinsky on January 27, 2015
For Florida real estate lawyers, it’s shocking to contemplate all of the many ways that Florida real estate agents and Florida real estate brokers have found to be underhanded in their dealings with buyers and sellers, all in the name of making a quick buck. The past few years (the time when the Florida real estate market has been rocked with widespread mortgage fraud and foreclosure actions) seems to have fueled bad acts by Florida real estate professionals.
It’s no wonder that the Florida Legislature has passed a series of laws requiring disclosures be made to potential buyers of Florida residential real estate, making it illegal for real estate professionals not to reveal and provide certain information about a property (like the dangers of radon gas). (See last week’s post for details here.)
Disclosure Under Florida Statute 475.278: Relationships Not Real Estate
However, there’s one real estate disclosure law that is particularly important here in Florida. It is Florida Statute 475.278, which protects residential real estate buyers from unethical real estate professionals by forcing disclosure of information that has nothing to do with property or houses. Florida Statute 475.278 requires a specific type of disclosure that must be made to the buyer — the disclosure of the kind of relationship and duties that exists between the buyer and the real estate agent.
Why? Because buyers may assume that the real estate agent who is showing them houses they might like to buy, or is chatting with them about the best neighborhoods for their kids or the quality of life for singles or families in a particular section of Miami or Fort Lauderdale or Palm Beach is working for them and is on their side. Wrong.
That assumption may be totally wrong and the friendly, charming real estate agent isn’t really working just on their side and solely in their best interests at all. Which makes Florida Statute 475.278 extremely important.
Specific Requirements in Florida 475.278 Residential Real Estate Disclosures
Since the risk of a residential real estate buyer or seller not understanding the limitations of their real estate agent or real estate broker relationship, not only are disclosures regarding the professional relationship requirement to be made under Florida law, they must be made in specific ways.
First, these disclosures must be written and documented. Second, they must confirm to specific legal requirements under Florida Statute 475.278 (c) including:
- They must be in uppercase and in bold font face so the disclosure is easily read;
- They must be placed in a prominent way within the document so that the information is easily found.
Types of Florida Real Estate Sales Relationships: Single Agent and Transactional Broker
Florida real estate brokers can act as either “single agents” or “transactional brokers.” Florida law defines both these terms. A Florida single agent relationship carries with it the highest duties to the customer (either a buyer or seller) because it means that the real estate professional is dedicated to serving only that customer’s best interests. (For more on the transactional broker relationship, see our earlier post.)
Single Agent Disclosure
How do you know if you have a “single agent” relationship with a Florida real estate broker? Check your contract.
Under Florida Statute 475.278(3)(a), there must be a written disclosure by the Florida real estate broker in a written representation agreement that includes specific information including:
- The relationship is a “single agent” relationship
- The real estate professional has a duty to the client to act with loyalty, confidentiality, and honesty
- The real estate professional will provide full disclosure including complete accounting of all monies
- All offers and counter-offers will be shared timely with the client.
Transactional Broker Disclosure
In Florida, a “transactional broker” has a limited deal with the buyer or seller and does not act as a fiduciary for either party. There’s no loyalty dedicated to one party in the real estate negotiations here: the real estate professional works with both sides to get a deal done.
Florida Statute 475.278(c) makes real estate professionals reveal this role to both sides in writing as well as informing everyone involved that the real estate professional, under Florida law, is required to do things like:
- Be honest with everyone
- Account for all monies involved in the transaction
- Disclose all material facts regarding a property even if they are hidden and not readily seen.
Transaction Broker Is Default Real Estate Relationship in Florida
Under Florida Statute 475.278(1)(b) it is legally established that unless there is a written agreement otherwise, the real estate professional is acting as a transaction broker.
If you want a single agent relationship with your real estate agent, then you need to get them to sign a Single Agent Representation Agreement with you.
Harmed by Failure of Florida Real Estate Agent to Disclose?
If you think you have been harmed by the failure of a Florida real estate professional to disclose things that they are legally required to do under Florida Statue 475.278, then you may have a legal claim for damages to pursue against the real estate sales associate as well as the real estate brokerage firm.
A Florida real estate lawyer can help you assess your situation and the best course to take here. Additionally, you may be able to file a complaint with the Florida Real Estate Commission for bad acts on the part of the real estate professional. The Commission can then act to punish the wrongdoer in several ways, including fines and suspension of their real estate license.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at email@example.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.