Any transaction for the sale of objects, including real estate, requires certain rules and regulations, which are necessary so that in the event of a disputable situation, one can resolve the issue using legal grounds. One such regulation was the caveat emptor or prudent shopper rule. According to this rule, the buyer cannot claim damages from the seller because one was not careful when buying. The only exception is when the seller intentionally conceals a defect that significantly affects the object’s price.
However, this rule was revised after the case of buying a house and uninhabitable condition of the roof. In the case Johnson v. Davis, 480 So. 2d 625 (Fla. 1985), the buyer made the first payment for the house after inspecting the exterior. However, after a while, it turned out that the roof and some places in the walls leak heavily during rain. After the buyers applied for a refund, the court ruled in favor of the buyers. It was due to the fact that the seller intentionally concealed a defect from the buyer that significantly affected the price of the house.
This case influenced the caveat emptor rule since earlier dishonest sellers were “covered” by this model. In other words, earlier, this rule had greater force, and the defendant could use it in more cases and win the case. However, now the court takes into account the fact that the defect was deliberately concealed since the seller could not have been unaware of the roof leaking during rain. In addition, things that should be explained according to the rules of honesty and justice do not fall under the rule of caveat emptor.
A similar situation occurred when the buyer discovered hidden damage when buying a commercial building. In the case of Fla. Holding 4800 v. Lauderhill Mall Inv., 4D20174 062016CA012986AXXXCE, the buyer stated that the purchased building does not meet the conditions under which the contract of sale was concluded. This was due to various technical problems, and the non-compliance with the condition of the building before the conclusion of the contract. Moreover, the buyer claimed that the seller deliberately concealed some facts about the condition of the building, which amounted to a violation of the contract of sale.
In addition, the clause “as is” was spelled out in the contract, which has legal force in such types of disputes. It is formulated by the fact that under this clause, the buyer is aware of the possible risks associated with the purchase. However, despite the risks, the buyer still agrees to buy this house. The problem is that under the wording “as is,” the seller can hide a wide range of damages and take advantage of the caveat emptor rule.
The buyer stated that the seller intentionally hid the damage. It is known that the caveat emptor rule does not cover those cases where damage or defects that significantly affect the price are intentionally hidden. However, it was determined that proper inspectors were not hired by the buyer’s side to assess the risks and detect defects. In this case, the buyer was aware of the possible risks, and the defects were not hidden. As a result, the caveat emptor rule comes into force, which gives advantages to the seller’s side. In other words, in this case, the fact that there was no suitable analysis of the premises was decisive, which constitutes the buyer’s acceptance of the risks.
References
Fla. Holding 4800, LLC v. Lauderhill Mall Inv., LLC, 317 So. 3d 121, 124 (Fla. 4th DCA 2021).
Johnson v. Davis, 480 So. 2d 625 (Fla. 1985).