Category Archives: Expert Witness

FLORIDA REAL ESTATE EXPERT WITNESS TESTIMONY. JOHNSON VS DAVIS. BY JASON STEELE

Quite often real estate licensees violate Florida Standards of Practice for real estate practitioners. These actions can lead to civil lawsuits where both buyers and sellers can suffer significant losses. Chapter 475, Florida Statutes, regulates the real estate industry and is the primary law upon which court decisions are made on monetary damages. Courts also look to prior case law decisions and the testimony of expert witnesses.  That is where you may need assistance from a qualified expert witness.  Jason Steele is a licensed real estate broker with the expertise to assist in such matters (see link below).

www.floridarealestateexpertwitness.com

One of the most common violations by real estate licensees deals with the ruling in Johnson vs. Davis concerning defects in the purchased residential property.  Many courts have interpreted and refined the application of this rule of law. From these cases one can conclude that in a home buyer’s nondisclosure claim against the seller, there are four elements: (1) the seller must have knowledge of a defect in the property; (2) the defect must materially affect the value of the property; (3) the defect must not be 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.

The key to this legal trend has been to establish that a seller has a duty to disclose known defects. The standard makes this an affirmative obligation to disclose – not just if asked but in any instance where known defects exist. Failure to disclose could result in legal action against the seller.  In essence, this turns the tide and makes the duty one of “seller beware” or perhaps “seller disclose.”  Where does disclosure begin? Who is responsible for disclosure?  What is the agent’s responsibility?  Anyone buying a house faces hidden unknowns. The seller is responsible for disclosing those defects if they materially affect the value. There are many types of defects, including Chinese drywall, mold, lawsuits, sinking slabs, unpermitted electrical, plumbing, etc. The best thing for a real estate agent to do is advise the seller to disclose the material defects that are known, and go one step further by getting a certified building contractor to do an in-depth inspection of their home and provide it to the realtor before the property is listed. This report should not be relied on by the realtor or buyer.  It should be viewed as just an opinion of conditions. The realtor’s buyer should always get their own report (this report is not required by law and is used as a precaution).

There is an old saying that I used as a former Florida Realtor GRI instructor:  “When in danger, when in doubt, write it out, write it out.”  Meticulous record-keeping is a must for any real estate agent. Agents have the responsibility to disclose any defects that are known to them. Most real estate agents deliver a material defect disclosure form that the sellers fill out and sign, which become part of the licensee’s records. I have testified in Johnson vs. Davis lawsuits.  They can be extremely expensive for the seller, the real estate agent, and the buyer if defects are not disclosed.  I have also testified in civil cases involving issues of undisclosed defects.  I recently was retained as an expert witness in a major million dollar plus lawsuit that settled prior to trial.  This case involved real estate agents as the sellers, and their son and daughter (also agents), who listed the property. The facts of that case present a good example of what not to do as a real estate agent.  It all boils down to following the requirements of Chapter 475, Florida Statutes, and the rules of the Agency, including:

1. Dealing honestly and fairly.

2. Accounting for all funds.

3. Using skill, care, and diligence in the transaction.

4. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the BUYER.

5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.

6. Limited confidentiality, unless waived in writing by a party, will prevent disclosure that the SELLER will accept a price less than the asking or listed price; that the BUYER will pay a price greater than the price submitted in a written offer; the motivation of any party for selling or buying the property; that a SELLER or BUYER will agree to financing terms other than those offered; or any other information requested by party to remain confidential.

7. Any additional duties that are entered into by the original agreement or by separate written agreement.

8. Limited representation means that a BUYER or SELLER is not responsible for the acts of the licensee. Additionally, parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the BUYER and the SELLER, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.

For more information on expert witness arrangements please contact me at jason@smithlawtlh.com.

Expert Witness: Lending a Hand in Real Estate Cases

“Do I need an expert witness in my real estate case?” This is an important question, and its answer may surprise you. It is simply, “Yes.”

As in many legal cases, the facts in a civil real estate case can be mired in the standards and practices of the industry. It is vital for the success of a real estate case that you and your clients can successfully navigate these facts with confidence.

In most civil real estate cases, there is an element of fraud, fraudulent inducement, misrepresentation, or a number of other violations of Chapter 475, Florida Statutes at issue. The most common of these include violations of the statutory duties required of a transactional broker. For example, Section 475.278(2)(c), Florida Statutes, requires brokers to use skill, care and due diligence in all transactions. In these cases, the most important testimony given by an expert relates to a broker’s duties as set forth in Section 475.278, Florida Statutes. This chapter clearly defines the duties of a broker for the protection of the consumers.

Florida law has a clear presumption in favor of finding that a transactional brokerage relationship exists between a broker and a client, unless otherwise provided in writing at the onset of any real estate transaction. A Transaction Broker Relationship is defined by statute as providing a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. Section 475.278(1), Florida Statutes. The duties of the real estate licensee in this limited form of representation include the following:

(a) Dealing honestly and fairly;

(b) Accounting for all funds;

(c) Using skill, care, and diligence in the transaction;

(d) Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;

(e) Resenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential.

An expert witness can be effective in clarifying these standards for the court as, quite often, the broker hides information that affects the value of real estate to fraudulently induce a contract. In addition, many brokers have poor recordkeeping habits and do not comply with paragraph (a) of this section: dealing fairly an honestly with all parties. In addition to the standards of the industry, realtors must comply with the National Association of Realtors Code of Ethics.

Our firm employs Jason Steele, a non-lawyer expert on real estate matters that can provide the testimony and support needed in real estate litigation. As the former Director of the Division of Real Estate within the Department of Business and Professional Regulation, Jason served eight years on the Florida Real Estate Commission and sat as a Quasi Judicial official on more than 3,000 disciplinary cases. In addition, he is a former senior real estate instructor for the Florida Association of Realtors and has 38 years of real estate experience.

If our firm can assist you with expert testimony and case development on a real estate matter, please do not hesitate to contact our offices.