Home Inspectors and Real Estate Agents in Florida: Buyer Beware

Posted By on August 26, 2014

For many home buyers in South Florida, finding that right house or condo to buy is an exciting moment. Some houses sound great on paper or look fabulous on online, but when you do a walk-through, the place just isn’t right. You keep looking until you find the property that you want to buy.

Most Buyers know the feeling — you go see a property, and it just feels right. Most if not all of your wish list is met. You’re ready to make an offer.

Closing on your waterfront Florida condo can be one of the most exciting days of your life!

However, as a smart purchaser you know that residential real estate can have all sorts of problems, especially here in South Florida. Unless you are savvy about things like plumbing, foundations, electricity, and more, it’s best to get help from a professional home inspector before you close the deal.

Real Estate Agents and Home Inspectors

Home inspectors are not a trade that most people use very often, and many home buyers will not know a home inspection service first-hand to call. Unfortunately, many Florida buyers rely on their real estate agent, who is quick to recommend a home inspector to the buyer. The real estate agent may even offer a few names for the buyer to choose from for the home inspection.

When this happens, it is my suggestion for you to be very careful!!

It’s very tempting for a real estate agent to offer the name of a home inspector who will work with that real estate agent to help get the sale nailed down. The inspector and the agent may be friends; they may be worse — partners in crime where the inspector gets a benefit from the agent for each “friendly inspection.”

Real estate agents profit from commissions on the sale of property. It’s in their best interests to get that property bought and sold. Home inspectors profit from inspections; the more they do, the more profit they make.

Florida home buyers shouldn’t be surprised to think that there may be real estate agents and home inspectors that find working together benefits both of them. Buyers need to realize that a home inspector referral from a real estate agent may be suspect and not in the buyer’s best interest. This is especially true if the real estate agent is working under a “transaction broker” arrangement which limits their responsibility to the buyer.

Long after the “friendly home inspection,” that naive home buyer may discover big problems with the purchased property: things like mold hidden behind walls or under flooring; the use of Chinese Drywall in the home; termites; failure to meet code requirements; and other expensive problems.

When the best interests of one party clash with the best interests of another, that’s a conflict of interests. In some of these situations, the buyer who has been harmed by a flawed or phony home inspection may have a real estate fraud lawsuit against the real estate agent, the seller and maybe the home inspector, too.

What Home Inspectors in Florida Should Do for Buyers

Home inspectors should provide the prospective home buyer with an accurate assessment of the conditions and quality of the home or condo they are thinking about buying. Inspectors should provide a written report that explains what they reviewed during their inspection of the property and details their findings and opinions on the home or condo.

Inspections should be thorough. Inspections that are done right are not cheap, but they are very important for a home buyer to have.

Florida Home Inspectors Aren’t All the Same

In Florida, new licensing laws were passed a few years ago (in 2011) that expanded the ability of individuals to get licensed by the State of Florida as a home inspector. If an applicant can pass the test, then they can become a Florida home inspector. From the NSHI site:

Florida Home Inspector Licensing Program
Florida grandfathering provisions for home inspector licensing ended on March 1, 2011. Home inspectors who currently want to be licensed for Florida must obtain a home inspection license from the Florida Department of Business & Professional Regulation. (FL BBPR)

Florida Statutes Chapter 468, Part XV requires:

(1) 120 hours of approved course instruction that includes 20 hours of hands-on training
(2) Pass the National Home Inspector Examination (NHIE) sponsored by the Examination Board of Professional Home Inspectors
(3) $300,000 commerical general liability insurance.

To apply for a Florida home inspection license, the applicant must have a high school diploma or its equivalent, complete an electronic fingerprint background check, be of good moral character, and include a $330 license fee.  

There are no experience requirements to apply for a Florida home inspection license and the license must be renewed every two years.

To separate the more experienced and knowledgeable home inspectors from the basic Florida inspector, there are additional qualifications that a home buyer can seek out in their inspector. Things like making sure the person is a paying member of the American Society of Home Inspectors (ASHI), for example.

Home inspectors with over 250 inspections can be designed as “certified home inspectors” by ASHI. If the home buyer has specific concerns about conditions, then he or she can look into hiring an inspector with specific expertise in that area, e.g., an inspector with a Mold Services license.

Additionally, home buyers should confirm that their home inspector has current malpractice (“E&O”) coverage, in case he makes an error or omission during the inspection of the buyer’s property. The prudent home buyer will also make sure that the inspector carries coverage to cover any personal injuries he may sustain during the inspection.  (Also, look at the Contract with the home inspector to see if they limit their liability.)

What Should a Florida Home Buyer Do if Harmed by a Faulty Home Inspection?

If you have purchased residential real estate here in Florida and find that the inspection of the home did not reveal defects in the property, then you may have a claim against the inspector as well as the seller and perhaps the real estate agent (and his or her real estate broker) for damages. Each circumstance is unique, and needs to be analyzed and assessed by an experienced Florida real estate lawyer.

Unfortunately, many Florida home buyers have been hurt by Florida home inspectors (especially since 2011 when the licensing law changed) and Florida real estate attorneys have many war stories about bad inspections and the damages that have resulted from them.

 

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.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.

Property Disclosure Statements: Duty to Reveal Hazards in Florida Must Be Disclosed to Home Buyers

Posted By on August 19, 2014

Most sellers and buyers of residential real estate here in Florida depend upon their real estate agents to help them through the process. For buyers, it’s making sure that they have all the information that they need to make an informed purchase. For sellers, it’s relying upon their agent to know what must be shared with the buyer and what need not be told to them in order to get the house sold.

In Florida, disclosures to real estate buyers are governed by case law and by statutory law; statutes were written and court cases were filed because sellers all too often failed to reveal something about the property which ended up harming a buyer. As a result, certain disclosures are now mandatory in every residential real estate transaction.

Still, sellers and buyers will continue to lean on the real estate experts to make sure that all the disclosures are being made — and there will be times when things are not revealed to buyers that should have been disclosed.

Which brings us to Florida and flood risks.

New August 2014 Broward County Flood Zone Maps

Yesterday (August 18, 2014), new flood zone maps became the law in Broward County, Florida, according to the Federal Emergency Management Agency (FEMA). These flood maps apply to all property in the county (there are similar maps for Miami-Dade and Palm Beach Counties, too).

These maps break down the risk of flooding in Broward County into “flood zones,” assigning areas with the biggest dangers of flooding due to storms or hurricanes with a specific zone designation (A, AE, AH, etc.).

Some flood zones legally require property owners to have flood insurance for their property. Other flood zones do not make flood insurance a legal requirement, but they may suggest flood insurance might be prudent.

It’s important to know what flood zone applies to any potential Florida real estate purchase.

Disclosure of Flood Risk is Required by Law

FEMA’s new August 2014 flood maps mean that real estate agents and real estate brokers need to disclose to potential buyers of real property in Broward County of their flood risks and flood insurance requirements under these new FEMA guidelines.

Broward County has published the flood maps on its website, and encourages the public to review the flood zones. Broward.org reminds everyone that in this part of the state, ”[a]ll areas are susceptible to flooding, although to varying degrees.“

Go here to see the new interactive flood zone maps at the Broward County web site.

Now that this information has been made available to the general public, real estate agents and brokers (and sellers) have a duty to disclose to buyers (or to make sure buyers are aware) of the flood risks associated with a particular piece of property;  buyers looking to purchase a home or condo in Broward County, should have the new August 2014 Flood Zone information provided to them regarding their potential purchase.

Flood Insurance Coverage as a Mortgage Requirement

One protection for buyers in Florida is the requirement that any property that is located in a flood zone, where the purchase is financed with a federally-backed mortgage, must be covered with flood insurance. Whether or not a private mortgage will demand flood insurance coverage depends upon that lender.  (Note, if a buyer purchases a property with cash, then the buyer has no outside party helping to protect them by requiring the purchase of flood insurance.)

A Florida Real Estate Lawyer Should Review The Disclosure Statements Before The End of Your Inspection Period

A Florida real estate lawyer who is routinely involved in real estate transactions should know to review the Property Disclosure Statement for you before the end of your inspection period. If necessary, the lawyer should address any issues he/she finds in the disclosure statement with the broker, agent and/or Seller, and negotiate those for you (maybe a lower price or a warranty?).

Ultimately, an experienced real estate lawyer should be able to guide you into determining whether or not you should go forward with closing in view of any problems that may exist — like a changed flood zone.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.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.

Is a Dyck O’Neal Lawsuit Valid if it is Served After July 1, 2014?

Posted By on August 10, 2014

An Update to The Most Frequently Asked Questions We Receive About Deficiency Collection Lawsuits.

We have posted before about some of the most popular questions we are asked about deficiency lawsuits.  Recently, the most often asked question is whether a Dyck O’Neal’s lawsuit is valid (related to old foreclosure cases) if the home owner is served after the July 1, 2014 deadline. Unfortunately, the answer lies in the question.  The July 1, 2014 deadline referred to in the statute relates to the date when the lawsuit must be filed with the Court, and not when it is served.  Thus, as long as Dyck O’Neal files its deficiency lawsuit on or before July 1, 2014, the lawsuit can not be barred for being untimely filed.

According to Florida Rule of Civil Procedure 1.070, a deficiency lawsuit must be served within 120 days after it is filed. If it is not served within that time frame, a home owner could file a motion to dismiss.  However, there is a clause in the rule, which states that if Dyck O’Neal can show “good cause” why the complaint was not served within the 120-day time frame, (like the home owner can’t be found because they now live in another state or country) the time frame to serve the lawsuit can be expanded to accommodate appropriate service.

Unfortunately, this  means home owners who thought they were in the clear because they didn’t receive a lawsuit by the July 1,  2014 deadline, still have several months to go before the 120 deadline passes. However, this doesn’t mean that there aren’t defenses available to these lawsuits. We recommend that you talk with an experienced real estate lawyer to learn about your rights.

To learn more, read:

Did You Get A Letter From A Debt Collector For A Florida Mortgage Deficiency Related to a Foreclosure Or Short Sale?

Dyck-O’Neal Increases Florida Deficiency Judgment Collection Efforts?: 19 Articles About Florida Deficiency Judgments

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Do you still have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.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.

Does a Home Buyer Have a Claim Because They Weren’t Told About a Problem with Their Home?

Posted By on August 5, 2014

What Type of Property Conditions Must Be Disclosed to Florida Home Buyers (And What Can Be Kept Hidden) Under Florida Law?

Under Florida law, a buyer can sue for damages, and  even rescind a transaction, where a seller or real estate agent doesn’t reveal a material problem with the home prior to purchase.  Unfortunately, there are also times when you can’t file a claim, leaving the buyer stuck.

 

The law also defines when you can sue and it identifies who may be be required to pay any damages i.e. seller, real estate agent, appraiser, inspector etc…

Florida Law Protects Home Buyers From Surprises

When you buy any piece of residential real estate in Florida there are laws on the books to protect the buyer from nasty surprises.  This protection may be surprising to people from other states because it’s “buyer beware!” in many jurisdictions outside of Florida.

It’s all about who bears the financial risk of home defects. In other states, the home buyer is solely responsible for determining the condition of his/her potential purchase without input from the Seller or other related parties. In Florida, it’s somewhat different.

In Florida, residential buyers are afforded protections.  Florida law places legal duties on others, including the Seller, to tell the buyer about known problems with a piece of property. Thus, if you buy a home in Florida and you learn after closing about a material problem with the property, then you may have a legal claim against the seller or real estate agent (and others).  Once you prove the party who knew or should have known about the defect breached their duty to you, the buyer, by not disclosing the defect, then the non-disclosing party(s) will usually be found to be financially responsible for remedying the problem with the home.

Who Can You Sue for Not Telling You About the Problem With The Home?

Almost always, this claim will be against the seller. However, you may also have a legal claim against others involved in the transaction, too. People like:

  • the seller’s real estate agent;
  • the seller’s real estate broker; and
  • the appraiser of the property.

They may all be jointly liable to you for financial damages resulting from their failure to tell you about the problem with the property before you bought it.

Sometimes, these defendants may be able to cover your financial injuries better than the seller of the property (they may have errors and omissions insurance a/k/a malpractice insurance).  It’s important to include them in your case if appropriate.

What Must Be Disclosed to the Florida Home Buyer

According to court cases (like Johnson v. Davis, 480 So.2d 625 (Fla. 1985)) and Florida statutes (like Florida Statute 689.261), home buyers can expect some things to be disclosed to them:

  • Property taxes on the property
  • Homeowner’s Association rules
  • Condominium Association rules
  • Risk of sinkholes
  • Past experience with termites or carpenter ants
  • Problems with structure or build, such as plumbing, roof, or central air conditioning system
  • Problems with mold, Chinese drywall, or other defects that can harm health of occupants

What about a buyer that is purchasing the home “As Is” from the seller?

In Florida, “as is” excuses the seller from paying for any repairs. It does NOT excuse the seller from any legal duty to disclose problems with the home. (See, Rayner vs. Wise Realty Co. of Tallahassee. )

What Does NOT Have to Be Revealed to the Buyer?

However, not everything has to be disclosed to the buyer in Florida. Under Florida law, for instance, there is NO legal duty to tell the home buyer that someone died there, even if they died by violent or criminal means in the residence.

What about murder or suicide?

The fact that someone died there, or even that a murder happened in the home, or someone committed suicide on the property, can be known by the seller. The seller can keep that troubling information from the buyer legally. (See Florida Section 689.25(1)(b))

Additionally, Florida buyers have no claim against anyone for failing to reveal that the prior occupants of their new home suffered from AIDS or were HIV-positive.

Seller Does Not Have Duty to Tell About Defects He/She Doesn’t Know Exists or About Minor Problems

In Florida, sellers must reveal problems with the home that they know or should have known exist. Sellers are not required to investigate the property to learn about hidden defects on the buyer’s behalf.

Furthermore, to win a case for failure to disclose the buyer must show that the defect is “material” and not a minor detail.

“The materiality of a fact is to be determined objectively by focusing on the relationship between the undisclosed fact and the value of the property. To be actionable, an undisclosed fact must materially affect the value of the property,” Billian v. Mobil Corp.

Get Legal Advice If You Have a Problem With Your New Florida Home Purchase

If you just bought a Florida home and now you’ve discovered something bad then you need to know if the seller, or the seller’s real estate agent and broker, among others, is responsible to you for the problem.

  • Was it material?
  • Is it covered under the disclosure laws?
  • Can you get money from them, and can you rescind the deal altogether?

Answers to these questions depend upon the facts of your situation. Believe it or not, things like federal statutes may also come into play (e.g., lead disclosures for pre-1978 homes). An experienced Florida real estate lawyer can be very helpful to unhappy buyers in Florida, but the buyer has to pick up the phone and ask.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.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.

Defects Discovered in the Home After Closing: What Can a Buyer Do?

Posted By on July 29, 2014

There are all kinds of problems with their new home that buyers may discover after they’ve left the closing table and moved into their new home or condo.

Home defects can be found in brand new homes that have just been built.  Problems can also be discovered in homes that have been around for awhile, too. (They are usually called “pre-owned homes.”)

The question is:  who is responsible for fixing this stuff?  What choices does a buyer have after discovering a big problem with his new home?

 

Drywall has been the cause of many Florida home defect lawsuits.

 

Steps to Prevent Unwelcome Defect Surprises

Here in Florida, the problem of home defects is hopefully kept to a minimum by the standard contract documents that are used by real estate agents.  To try and minimize certain common issues and to standardize how matters are handled, the Florida Bar Association has endorsed certain real estate agreements for use in residential sale and purchase transactions.

In these standardized documents, language is included giving the buyer a right to inspect the home or condo for certain period of time before closing.  This is done so the buyer can discover problems (defects) and decide whether or not to terminate the contract or go through with the purchase.

Most defects and problems that are found during this inspection period, are resolved between the buyer and seller before closing.

Unfortunately, some are not.

Examples of Home Defects Discovered by Buyers After the Sale

It can be such a disappointment, finding issues after the purchase of your new single family home or condo. Still, it happens to a lot of buyers.  Most every home buyer can expect a few unwelcome surprises in the condition of their new property.

The question is, what are your options as a buyer when this happens?

Here are just a few examples of things Florida buyers have discovered in their homes after the sale is completed:

  • The existence of a septic tank
  • Leaky roof
  • Electrical and wiring issues
  • Cracks in the foundation
  • Cracks in the walls
  • Soil in the yard is not graded right (which can harm home’s foundation)
  • Flashing is missing
  • Toilets aren’t working right or a funny smell is coming from the toilet
  • Drywall problems (including Chinese drywall being used)
  • Air conditioning drainage issues
  • illegal garage or porch conversions or additions

No home or condo is perfect; it’s to be expected that the home buyer may find some defects as boxes are unpacked and the family settles into their new place. Often, these are just cosmetic problems or minor fixes.  New construction often comes with a “punch list” because the builder expects to return and tidy up a few things.

However, there are other situations where the home defects are serious and costly. Some defects permanently damage the property, and some can even threaten the physical health of the people that live there.

Serious Problems Discovered by the Home Buyer

For instance in Florida, humidity and weather are a big deal. We live near the Atlantic Ocean and the Gulf of Mexico and all that water threatens construction here with moisture, which can lead to huge and dangerous problems like toxic mold growing within walls. Moisture can also rot wood over time. Foundations can be threatened by moisture in the soil if drainage isn’t proper.

Drywall is another very serious home defect that has impacted a huge number of Florida home owners. For details on how drywall can harm homes and health, check out the Florida Department of Health website.

Of particular danger, were homes that were constructed in Florida (and other parts of the country) with drywall manufactured in China. Chinese drywall was purchased and used to build homes all over Florida and the rest of the United States; problems that arose from this defective drywall became the basis for lawsuits that were filed by hundreds of home owners.

Fix and Repair? Or Should You Make a Claim?

Only the home owner can decide where to draw the line.  It’s an individual decision between dealing with the problems he has discovered himself or demanding that the seller take responsibility for them.

Legally, in Florida it is legally required for the seller to disclose to the buyer before the deal is completed that there are defects in the home. However, for Florida residential real estate, the seller is only required to tell the buyer about any home defects that the seller actually knows about or reasonably should have known existed.

Legal claims can be made against the seller after the buyer has closed on the property. Lawsuits can be filed for both property claims and personal injury damages (as for example, when people become ill from inhaling mold spores).

An experienced Florida real estate lawyer can advise the home buyer of their legal remedies and help them decide if pursuing a lawsuit for damages resulting from the discovered defects, or rescission of the transaction, is their best option in resolving the problem.

Each case is different, and in Florida there may be specific federal and environmental laws that must also be considered by the home buyer as potential legal bases for claims not only against the seller, but against the real estate agent, the inspector, the appraiser, and other parties.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.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.

 

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