According to Florida law, common claims against house flippers often involve allegations of fraud and misrepresentation (failure to disclose), breach of contract, and violations of consumer protection laws:
1. Fraud and Misrepresentation: House flippers may be sued for fraud if they knowingly conceal, fail to disclose, or misrepresent material defects in the property. These sellers have a duty to disclose known defects even when the contract contains an “As-Is” clause:
An “as is” clause in a contract for the sale of residential real property does not waive the duty imposed by Johnson v. Davis to disclose hidden defects in the property. See Levy v. Creative Constr. Servs. of Broward, Inc., 566 So.2d 347 (Fla. 3d DCA 1990); Rayner, 504 So.2d at 1364.
See: Syvrud v. Today Real Estate, Inc., 858 So. 2d 1125 (where the buyers sued a house-flipper and the listing broker when knew of hidden defects, including structural issues and water damage, but failed to disclose them before the sale). Additionally, in a separate case, the buyer sued the sellers for failing to disclose known defects, including structural damage and a failing foundation, which the sellers were aware of due to their experience in real estate and house-flipping projects. See: Bowman v. Barker, 172 So. 3d 1013
2. Breach of Contract: Claims for breach of contract can arise if the house flipper fails to fulfill the terms of the sale agreement including, for example, failing to disclose the existence of a foundation settling problem in condominium. To prevail on a breach of contract claim, the buyer needs to prove the seller had knowledge of a defect. which materially effected the value of the property, that was not readily observable and unknown to buyer, and the seller failed to disclose the defect:
A nondisclosure claim under Johnson has four elements: (1) the seller of a home must have knowledge of a defect in the property, (2) the defect must materially affect the value of the property, (3) the defect must be not readily observable and must be unknown to the buyer, and (4) the buyer must establish that the seller failed to disclose the defect to the buyer.” Jensen v. Bailey, 76 So. 3d 980, 983 (Fla. 2d DCA 2011).
See: Sage v. Pahlavi, 358 So. 3d 434
3. Negligent Failure to Disclose: House flippers can also be sued for negligence if they fail to disclose defects that they should have known about. In Addison Construction Corporation v. Vecellio, the buyers alleged negligent failure to disclose defects, among other claims [6].
Addison Constr. Corp. v. Vecellio, 240 So. 3d 757
4. Violations of Consumer Protection Laws: Claims under consumer protection statutes, such as the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), can be brought against house flippers for engaging in unfair or deceptive practices. In Vanacore Construction, Inc. v. Osborn, homeowners alleged violations of FDUTPA due to water intrusion and other construction defects [7]. Similarly, in Guevara v. Lamothe, the homeowner alleged violations of FDUTPA along with fraud and breach of contract [8].
Vanacore Construction, Inc. v. Osborn, 260 So. 3d 527
Related:
Seller’s Duty to Disclose In Real Estate Transactions
Does a Home Buyer Have a Claim Because They Weren’t Told About a Problem with Their Home?
Concealment, Nondisclosure And Silence By Florida Real Estate Sellers
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