by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

VENDOR AND PURCHASER; MISREPRESENTATION; LATENT DEFECTS: Test of whether undisclosed conditions are material is whether they foreseeably would have been relevant to purchaser, not whether they caused problems to seller. Dorton v. Jensen, 676 So.2d 437 (Fla.App. 2 Dist. 1996).

Sellers testified that they had experienced some water coursing up against the back of their home in heavy rains, and even had some seepage into the house under the doorjamb. But sellers further testified that they had cured the problem with a silicone application under the door, and did not regard the problem as an important one. Sellers did not disclose the problem to buyers, even when buyers inquired whether it might be adviseable to acquire federal emergency flood insurance.

Later, when buyers experienced major flooding in very heavy rains, buyers sought to rescind the purchase based upon the misprepresentation. At trial, buyers testified that they would not have bought the property if they had known of the water problem. Although the trial court acknowledged that the sellers had represented to buyers that flood insurance was not necessary and that they had experienced no high water problems, it concluded that the experiences described by the sellers amounted only to minor inconveniences and did not have to be disclosed.

On appeal, held: reversed. The appropriate test is whether the sellers should have foreseen that the buyers would have found the information relevant, not whether the sellers viewed it as problematic.

Comment: Although the difference in phrasing is subtle, it undoubtedly is an important distinction. Sellers should err of the side of disclosure, and should not be permitted to rationalize non disclosure of matters that they ought to realize are relevant to buyers on the grounds that sellers do not view the problems as important.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233 or LaPricaMims@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.