Last Update: 4/14/21

Unfortunately, in Florida, fraud claims against real estate agents are common. Fraud claims against real estate professionals cover a variety of situations, but they all share a common characteristic: this was not just a mistake, the real estate agent has intentionally done something wrong. The intentional bad act by the real estate agent has hurt the victim who’s only real remedy is to pursue a fraud claim by filing a lawsuit.

Intentional Acts of Fraud by Florida Real Estate Agents

In Florida real estate transactions, there are certain circumstances that happen over and over again that lend themselves to a fraud claim.

These include:

• Real estate agent knows that the real square footage of the home is not the same as what the buyers believe it to be and keeps quiet about the discrepancy;
• Real estate agent knows there’s an interior wall water leak and says nothing;
• Failure to disclose that Mold or Chinese drywall exists on the property;
• Real estate agent is aware that the real estate is subject to rezoning, environmental regulations, or other pending laws that will thwart the buyer’s intended use of the real estate and fails to reveal the information;
• Real estate agent knows the foundation is cracking and has been hidden by carpeting or patch jobs, and remains silent.

In most fraud cases involving real estate agents in Florida, the fact pattern involves some kind of misrepresentation on the part of the real estate professional where the agent has a duty to disclose something to the buyer and fails to do so because the real estate agent believes that if the information is shared with the buyer, then the deal won’t close. This duty of disclosure is shared by both the seller of the property and the real estate agent (or broker). See, Johnson v. Davis, 480 So.2d 625 (Fla.1985).

Damages When Real Estate Agent Commits Fraud

Under Florida law, there are several areas where a plaintiff can expect monetary compensation and damage awards in a real estate agent fraud case. These damage awards cover injuries not only related to the property itself but also, in some circumstances, cover injuries to the plaintiff individually.

Property damages resulting from real estate agent fraud involve things like:

• Lost value in the property (subject matter of the real estate transaction)
• Cost incurred by the plaintiff to repair a defect in the property
• Lost profits
• Replacement costs
• Closing costs

Damages can also be legally assessed for what the plaintiff has experienced, such as:

• Physical consequences of the event (for example, medical expenses from exposure to mold caused by hidden water leak)
• Emotional distress

Finally, because fraud involves an intentional act (more than a mistake was made here), Florida law provides for “punitive” or “punishment” damages, which can be awarded against a real estate agent as “exemplary” damages which are designed to deter other real estate agents from doing this sort of thing in the future, along with punishing the wrongdoer in the particular case. (It is important to know that punishment (punitive) or exemplary damages will not be covered by the real estate agent’s E&O coverage. Insurance carriers will cover the property damages and the personal damage claims, but any punitive damages awarded by a jury will not be paid by any insurance policy. The real estate professional will be personally liable for this damage award).

Florida Law Protects Home Owners in Fraud Cases

Here in Florida, there is a huge amount of law on the books that serves to protect home buyers and homeowners from damages they incur as the result of buying their homes. For instance, claims can be made for things like warranties that have been breached, both as statutory warranties as well as the general warranty of habitability. Contract claims can be made (breach of contract lawsuits) against sellers, appraisers, and inspectors for failures that have harmed the buyer.

However, in fraud cases, the facts must support a case that goes to more than just a contract dispute. Here, the plaintiff must demonstrate with particularity an intent to harm by the defendant. This is a bigger burden for a plaintiff to prove with facts and it is a more complicated case insofar as it involves tort law claims not just contractual ones.

A good piece of advice is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions. (Please note, we do not take these cases on a contingency basis.)

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