Article 6 of 10 in the Florida Real Estate Contracts Series
A Florida residential seller’s disclosure duty does not disappear because the contract says “AS IS.” The seller may have no contractual obligation to repair a condition but still have a legal duty to disclose a known, hidden fact that materially affects the property’s value.
That distinction can determine whether a buyer closes with an undisclosed defect, cancels within a contractual deadline, or later pursues rescission or damages. Buyers should investigate; sellers should disclose known facts accurately; and both sides should document what was delivered and when.
Florida’s Four-Part Seller-Disclosure Rule
In Johnson v. Davis, 480 So. 2d 625 (Fla. 1985), the Florida Supreme Court held that when a residential seller knows of a fact that materially affects the property’s value, the fact is not readily observable, and the buyer does not know it, the seller must disclose it.
- Actual knowledge: The seller knows the fact.
- Material effect: The fact materially affects the property’s value.
- Not readily observable: The condition is not apparent from ordinary observation.
- Unknown to the buyer: The buyer does not already know the fact.
A buyer pursuing a Johnson nondisclosure claim need not prove that the seller intended to deceive. Actual knowledge is still required, however; constructive knowledge—what the seller arguably should have known—is not enough. Because a seller rarely admits knowledge, it may be shown through circumstantial evidence such as prior repairs, insurance claims, estimates, invoices, messages, permits, or repeated complaints.
A Practical Disclosure Decision Chart
| Question | Why it matters | Practical response |
|---|---|---|
| Does the seller actually know the fact? | Actual knowledge is required | Collect reports, claims, invoices, permits, and communications |
| Could it materially affect value? | Minor conditions may fall outside the rule | State the known facts without minimizing or diagnosing |
| Is it readily observable? | A hidden condition creates greater risk | Do not assume an odor, stain, or patch reveals the full problem |
| Does the buyer already know? | Known facts generally are not concealed | Keep proof of delivery, receipt, and follow-up responses |
| Was only part of the story told? | A half-truth may mislead | Correct incomplete statements and provide material context |
This chart is a screening tool, not transaction-specific legal advice.
“Readily Observable” Is Not the Same as “Discoverable”
A seller should not assume that a buyer loses protection merely because a more invasive inspection might have found the problem. Florida decisions distinguish a condition that is readily observable from one that could have been discovered through greater diligence.
In Lorber v. Passick, 327 So. 3d 297 (Fla. 4th DCA 2021), the court reversed summary judgment in a dispute involving alleged prior flooding and a dank or musty smell. A clue does not necessarily make the underlying history or severity obvious.
There is an important limit. As discussed in Sage v. Pahlavi, 357 So. 3d 1251 (Fla. 4th DCA 2023), once a seller discloses a condition, a buyer who ignores it, asks no meaningful follow-up questions, and proceeds may have difficulty later claiming that the condition was concealed. Buyers should investigate disclosed problems while inspection and cancellation rights remain available.
An AS IS Clause Does Not Authorize Concealment
An AS IS contract generally permits the seller to decline repairs and places inspection decisions on the buyer. It does not automatically waive a residential seller’s duty to disclose qualifying facts. Florida cases including Levy v. Creative Construction Services of Broward, Inc., 566 So.2d 347 (1990), D & M Jupiter, Inc. v. Friedopfer, 853 So. 2d 485 (Fla. 4th DCA 2003), and Lorber v Passick recognize that AS IS language does not necessarily defeat a properly supported nondisclosure or fraud claim.
Likewise, answering a disclosure question technically but incompletely can be dangerous. When a party chooses to speak, the statement should tell the whole material truth rather than create a misleading half-truth. A disclosure form also is not a substitute for updating the buyer when a new material condition arises before closing.
Common Conditions That Create Disclosure Risk
Prior or recurring roof, window, plumbing, or building-envelope leaks;
Flooding, drainage problems, water intrusion, or repetitive-loss history;
Known mold, moisture, termite, or wood-destroying-organism damage;
Foundation, structural, seawall, pool, or retaining-wall problems;
Unpermitted work, open permits, or improvements that failed inspection;
Known electrical, HVAC, sewer, septic, or well defects;
Insurance claims or repairs that did not fully correct the condition; and
Boundary, access, code-enforcement, lien, or property-use issues
Describe facts, dates, and records instead of offering unsupported conclusions. “Water entered near the east bedroom after heavy rain in June 2026; ABC Roofing patched the area; invoice attached” is more useful than saying, “the roof is fine.”
Florida Statutory Disclosures May Apply Too
| Subject | Florida authority | Key point |
|---|---|---|
| Flood risks | F.S. § 689.302 | Required disclosure at or before execution of a residential sales contract |
| Known sewer lateral defects | F.S. § 689.301 | Disclosure before contract execution |
| Mandatory HOA community | F.S. § 720.401 | Required summary and possible pre-closing cancellation right |
| Condominium resale | F.S. § 718.503 | Required language, documents, and statutory voidability rules |
Federal lead-based-paint rules may apply to many pre-1978 homes. Other Florida notices may concern subsurface rights, special districts, radon, or association records. By contrast, Florida Statutes § 689.25 provides that certain deaths at a property and an occupant’s HIV/AIDS diagnosis are not material facts that must be disclosed. That narrow rule does not exempt physical defects.
Residential and Commercial Sales Are Different
The Johnson duty applies to residential property. Florida generally continues to apply caveat emptor—buyer beware—to commercial real estate, subject to recognized exceptions such as fraud, active concealment, fiduciary relationships, and other contract or statutory duties. See Wasser v. Sasoni, 652 So. 2d 411 (Fla. 3d DCA 1995).
Commercial buyers should negotiate representations, warranties, access, and due-diligence rights rather than assume residential rules apply.
Different Legal Theories Require Different Proof
| Theory | Typical focus | Important distinction |
|---|---|---|
| Johnson nondisclosure | Known, material, non-observable fact unknown to residential buyer | No separate intent-to-deceive element |
| Fraudulent misrepresentation or concealment | False statement, concealment, intent, reliance, and loss | Requires proof beyond mere nondisclosure |
| Negligent misrepresentation | False information supplied without reasonable care | Elements and remedies differ |
| Contract or statute | Promised representations, disclosure clauses, or required notices | Text, timing, notice, and remedy provisions control |
The facts may support more than one theory, but the elements are not interchangeable.
Broker Duties and Potential Remedies
Florida Statutes § 475.278 requires real estate licensees to disclose known facts materially affecting residential property value that are not readily observable. The Florida Real Estate Commission’s disciplinary guidelines appear in Florida Administrative Code Rule 61J2-24.001.
Depending on the claim and evidence, a buyer may seek rescission, return of a deposit, benefit-of-the-bargain or repair-related damages, and other relief. Prompt action matters: contract notice requirements, inspection deadlines, statutes of limitation, evidence preservation, and continued ownership decisions can affect available remedies.
Seller and Buyer Action Plans
For sellers
Gather inspection reports, claims, permits, invoices, warranties, and repair records;
Answer accurately; do not guess, conceal, minimize, or provide a half-truth;
Update disclosures when a material condition arises before closing;
Retain proof of what was delivered, to whom, and when; and
Ask counsel how to address uncertain or disputed conditions.
For buyers
Use the inspection period; a disclosure form is not a warranty;
Investigate disclosed issues and ask written follow-up questions;
Order specialized inspections when clues justify them;
Verify insurance availability and cost before applicable deadlines; and
Preserve listings, reports, photographs, messages, estimates, and notices.
Also review Article 1 on contract review, Article 2 on deadlines, Article 3 on names and property details, Article 4 on addenda, and Article 5 comparing AS IS and repair contracts.
Get the Disclosure Record Right Before Closing
Disclosure disputes often begin with vague answers, missing attachments, undocumented conversations, or late discoveries. A Florida real estate attorney can review the contract and disclosure package, identify missing statutory language, evaluate known conditions, and document the parties’ agreement before critical deadlines expire.
Need help with a Florida seller disclosure or hidden-defect issue? Call Attorney Shah today at 754-888-2726 to discuss flat-fee contract review or buyer and seller representation.
This article provides general educational information, not legal advice. Disclosure duties, defenses, deadlines, and remedies depend on the property, contract, timing, knowledge, and evidence. Reading this article does not create an attorney-client relationship.