Authored By: Ryan Featherstone, Esq. rfeatherstone@dunlapmoran.com
Below is a summary of 3 recent Florida published cases of note to any real estate practitioner in our state. Please take note of these important cases in your practice!
Real Estate Agency and Agents do not have a statutory duty to investigate unknown defects to properties [Busuttil v. Certified Home Inspections, LLC, et al, No. 1D20-2758 (Fla. 1st DCA, 2021)]
The Seller of a residential property completed a Seller’s Disclosure Form representing that the roof on the home was approximately one (1) year old and came with a transferrable warranty. The home inspector did not observe any issues with the roof during inspection. After closing, it was discovered that the rear of the roof had deteriorated and was older than the front of the house, and that the roof area where there was a leak was part of an unpermitted addition to the house. The real estate agent was named as a defendant in the suit by the Buyer for negligence and misrepresentation. The court ultimately found that while section 475.278, Florida Statutes imposes a duty on the real estate agent to disclose all known facts that materially affect the value of the subject property and are not readily observable, it did not impose a duty to investigate unknown encumbrances or defects. The court declared that if the Legislature intended to include a duty to investigate properties for unknown facts when drafting the law, it could have done so.
Unsigned Emails and Text Messages are not a contract [Walsh III v. Abate, 47 Fla. L. Weekly D702 (Fla. 4th DCA 2022)]
This case involved a lawsuit over a purported contract created by a written offer signed by the Buyer and follow-up emails and text messages amongst the real estate agents involving counteroffer and acceptance language as to purchase price and closing date. After the text messages and emails confirming these terms as to price and closing date, the Seller accepted a different offer from a third party. The plaintiff/buyer filed suit for specific performance based on the initial offer and the confirming text messages and emails, claiming a contract existed. The “statute of frauds” in Florida states that no action shall be brought upon any contract for the sale of lands unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof, shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized. Section 725.01, Fla. Statutes. The court in this case found that there was no written agreement signed by both parties as required by the statute of frauds. The court stated that dispositively, the Seller did not sign the initial contract/offer, and neither party signed the modification of price and closing date (i.e. the text messages and emails).
Attaching Addendum to Agreement without specifically incorporating it, fails to make it part of the agreement [Mercado v. Sridhar, 48 Fla. L. Weekly D2188 (Fla. 3d DCA 2023)]
This case involved a fully executed contract that contained an addendum prepared by the Buyer and revised by the Seller, but which addendum was never fully executed. The addendum (regarding the home’s furniture and a leaseback option), was not incorporated into the contract in any way, no box in paragraph 19 (Addenda) was checked, and no additional terms relevant to an addendum were identified anywhere in the contract. The Seller argued that there was no contract because the parties had not reached a meeting of the minds regarding the issues contained in the addendum, and that those issues were essential to the formation of the contract. The Buyer argued that the form contract itself contained all the requirements of a contract, was fully executed by the parties, and because the addendum was not incorporated into the form contract, which also contained an integration clause, therefore the form contract constituted the entire agreement between the parties. The court agreed with the Buyer and granted the Buyer summary judgment. The addendum was deemed a separate, distinct, severable form, and collateral to, the form contract. The court found that the mere act of attaching an addendum to the form contract when making the offer/counteroffer was insufficient to make the addendum an essential part of the form contract, such that the addendum’s terms had to be agreed to in order for the form contract to be enforceable.
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