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Do your homework before you buy or sell!

September 12, 2017 Posted in Blog

In Stev-Mar, Inc. v. Matvejs [678 So. 2d 834, 837-38 (Fla. Dist. Ct. App. 1996)], Stev-Mar sued the seller, and the real estate agents for fraud and/or negligent misrepresentation, based on representations that the waterfront lot in question was capable of being developed as a single family residence. Although the buyer hired an attorney for purposes of the real estate closing and requested that the attorney verify that the lot could be used as a home site, the buyer's attorney merely checked the zoning on the property and found that it had the proper zoning. Based on the present record, however, it appears that the buyer's attorney did not investigate further and did not discover that the property had not been replatted. The court, relying on the Florida Supreme Court’s holding in Besett v. Basnett, 389 So.2d 995 (Fla.1980), held that whether or not the purchaser had undertaken an investigation, the seller was liable for its fraudulent misrepresentation.  

This case involves due diligence, a subdivision’s expectations and a government’s plans. The lesson is clear: Do your homework before you buy or sell. 

In Azam v. M/I Schottenstein Homes, Inc. [761 So. 2d 1195 (Fla. 4th DCA 2000)], homeowners in the Brindlewood subdivision in Palm Beach County sued the subdivision developer who had indicated the neighboring property was a “natural preserve” left in a permanent natural state.

On the contrary, the County had plans on file to build a school on the very same property!

 The Court looked at the case of Pressman v. Wolf, 732 So. 2d 356 (Fla. 3d DCA 1999). It had held that “statements concerning public records cannot form the basis for a claim of actionable fraud.” The Court also cited Nelson v. Wiggs and its holding that the buyer must ascertain the facts based on the “reasonableness of the buyer’s actions vis-a-vis the extent of investigatory effort that one would expend to discover such records.”

The Court held that it disagreed with Pressman and stated that whether the buyer exercised ordinary diligence in discovering the truth “should be determined on a case-by-case basis.”

With offices in downtown Pensacola, Pace and Pine Forest, Clear Title provides professional residential real estate closing services throughout the Florida Panhandle. If you are looking for a professional closing company with a long track record of successful, error-free closings, we invite you to get in touch. To speak with one of our professionals about your closing in Northwest Florida, inquire online or call Pace office (850) 994-3838Pine Forest office (850) 202-8518 or downtown Pensacola (850) 378-8765  today.

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