Rogers Towers: Commercial Property Owners: Is there a duty to disclose in Florida?

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Explore:  Duty to Disclose

[author: L. Javan Grant]

You own a commercial building which has been on the market for over two years. Finally, after anxiously waiting, a potential buyer emerges and shows some interest. There is just one problem, you know that the building needs a new roof based on leaks you discovered a few days ago. Do you, as the commercial property owner, have a duty to disclose this problem to the potential buyer? The answer: It depends.

Generally, in commercial real estate transactions, there is no affirmative duty to disclose material facts which impact the value of the property. Further, mere non-disclosure of a material fact unaccompanied by words or acts sufficient to constitute active concealment may not be unlawful. There are, however, exceptions to these general rules. First, you cannot actively conceal the alleged problem or defect in order to prevent the purchaser from discovering it through independent inquiries or investigation. Second, the buyer must have an equal opportunity to become aware of the problem or defect. Third, if you disclose part of the problem or defect, you must disclose the full extent of the issue. Finally, Florida law will generally impose a duty to disclose the issue if there exists a fiduciary relationship between the parties.

In summary, provided that you do not attempt to cover up the roof problem, make only a partial disclosure of the problem and you provide the buyer an opportunity to inspect the roof, you should not have an affirmative duty to disclose the leaky roof to the buyer.

Topics:  Duty to Disclose

Published In: Administrative Agency Updates, Commercial Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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