Real Estate Purchase/Sale Contract Disclosures- Court says HIRE A LAWYER

Recently, the 5th District Court of Appeal (DCA) ruled (decision here) on a case involving non-disclosure issues in the context of the purchase and sale of residential real estate.

The buyer and seller executed 2 $1 million contract for purchase of lots in a development.  After the closing, Billington brought suit claiming that he was induced to enter into the contract via misrepresentations.  He alleged misrepresentations regarding his ability to construct boat docks on the lots as well as the price of other lots sold to other buyers.

The trial court dismissed Billington’s lawsuit.  The court found that these contracts contained clauses that contradicted the lawsuit.

14. BROKER AGENCY DISCLOSURE; COMMISSIONS; DISCLAIMER OF REPRESENTATIONS. . . . . NOTE: BEFORE BUYER SIGNS THE CONTRACT, BUYER SHOULD READ IT CAREFULLY AND IS FREE TO CONSULT AN ATTORNEY OF BUYER’S CHOICE. . . . . 1 See infra for a discussion of some of the conflicting interpretations of Oceanic Villas. 3

c. Buyer understands and acknowledges that the salespersons representing Seller in connection with this transaction do not have authority to make any statements, promises or representations in conflict with or in addition to the information contained in this Contract and the Community Documents, and Seller and Broker hereby specifically disclaim any responsibility for any such statements, promises or representations. By execution of this Contract, Buyer acknowledges that Buyer has not relied upon such statements, promises or representations, if any, and waives any rights or claims arising from any such statements, promises or representations. . . . .

ANY CURRENT OR PRIOR UNDERSTANDINGS, STATEMENTS, REPRESENTATIONS, AND AGREEMENTS, ORAL OR WRITTEN, INCLUDING, BUT NOT LIMITED TO, RENDERINGS OR REPRESENTATIONS CONTAINED IN BROCHURES, ADVERTISING OR SALES MATERIALS AND ORAL STATEMENTS OF SALES REPRESENTATIVES, IF NOT SPECIFICALLY EXPRESSED IN THIS CONTRACT OR IN THE COMMUNITY DOCUMENTS, ARE VOID AND HAVE NO EFFECT. BUYER ACKNOWLEDGES AND AGREES THAT BUYER HAS NOT RELIED ON ANY SUCH ITEMS.

The appellate court found that there were such “non-reliance clauses” and waiver clauses in law that were enforceable as such here; despite Billington’s claims of fraud and that these clauses did not negate the fraud.

The 5th DCA found that one could not sign  contract stating that he would not rely upon seller’s statements are representations, and then claim that seller misled him.  After all, public policy strongly favors the enforcement of contracts, and the law presumes that parties to a contract has read it and understood its contents.

The main take-away from the court in stating: “contracting parties can protect themselves against such fraudulent practices by respecting the gravity inherent in the contracting process and carefully reviewing a contract to ensure that material representations are expressed in the instrument,” is to HIRE A LAWYER when signing any contract including one to purchase real estate.  Do not rely on what seller or realtors say either as they cannot give you legal advice or protect your interests.

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