The Johnson v. Davis Rule: What Florida Sellers Must Disclose About Property Defects

Perhaps you just discovered major water damage behind freshly painted walls. The seller never mentioned leaks. Now you’re wondering whether Florida law required disclosure of this problem before you signed the contract. The answer lies in a landmark Florida Supreme Court case that changed how property transactions work throughout the state.

Johnson v. Davis established that sellers must disclose known, material defects that affect property value and aren’t readily observable to buyers, particularly in residential transactions. This 1985 ruling created a clear duty for property sellers: hiding problems you know about violates Florida law, even when contracts say “as-is.” Understanding what sellers must disclose protects you whether you’re buying or selling property.

Key Takeaways for Johnson v. Davis in Florida

• The Florida Supreme Court’s 1985 decision in Johnson v. Davis established that sellers of property must disclose facts that materially affect the property’s value, which are not readily observable and are known to the seller but unknown to the buyer.
• Material defects include structural problems, roof leaks, foundation issues, mold, plumbing failures, electrical hazards, and similar conditions that significantly impact property value, safety, or desirability.
• Sellers must disclose latent defects—problems not visible during reasonable buyer inspections—even when contracts contain “as-is” clauses or limited warranty provisions.
• Buyers who discover undisclosed defects may pursue contract cancellation, earnest money deposit recovery, or damages depending on when they learned about the problems and what the contract requires.
• Proving a Johnson v. Davis violation generally requires showing that the seller had actual knowledge of a material defect, the defect was not readily observable, the buyer did not know about it, and the seller failed to disclose it before the buyer committed to the purchase.

What Johnson v. Davis Actually Says About Seller Disclosure

The Johnson v. Davis case involved buyers who discovered a leaking roof after they purchased a home. The sellers knew about the leak but painted the ceiling to hide water stains. The Florida Supreme Court ruled that sellers must disclose known defects materially affecting value, even when buyers don’t specifically ask about problems.

This decision rejected the old “caveat emptor” approach—let the buyer beware—that previously governed Florida real estate. The court recognized that buyers typically lack the specialized knowledge to discover hidden defects and that sellers occupy a superior position regarding property conditions.

Courts most frequently apply the Johnson v. Davis duty in residential real estate transactions, but the decision states that this disclosure obligation is equally applicable to all forms of real property. Commercial transactions may still involve different expectations and contract terms, so how the duty applies varies with the circumstances.

Understanding Material Defects Under Florida Law

Material defects significantly impact property value, safety, or desirability. Florida courts examine whether a reasonable buyer would consider the problem important when deciding whether to purchase or what price to pay.

Problems That Typically Qualify as Material Defects

Major issues that affect property integrity or habitability generally meet the materiality standard. These defects change how buyers evaluate properties and influence purchase decisions.

Common material defects include:

• Structural damage to foundations, load-bearing walls, or framing
• Active or past roof leaks and associated water damage
• Plumbing failures, sewer line problems, or chronic drainage issues
• Electrical hazards, outdated wiring, or fire risks
• Mold growth, especially toxic mold that affects air quality
• Termite damage, active infestations, or wood-destroying organisms

These problems cost significant money to repair and affect how properties function. Buyers typically view them as deal-breakers or reasons to renegotiate the price substantially.

When Defects Might Not Qualify as Material

Minor cosmetic issues rarely rise to materiality under Johnson v. Davis Florida standards. A cracked bathroom tile, faded paint, or worn carpet typically doesn’t trigger disclosure duties because these problems don’t significantly affect value or require expensive repairs.

Florida courts examine each situation individually. A small crack might seem minor until an inspection reveals it indicates foundation movement. Context matters when evaluating materiality.

The Difference Between Latent and Visible Defects

Johnson v. Davis focuses on latent defects—problems not readily observable through reasonable buyer inspection. Sellers must disclose hidden issues that buyers wouldn’t discover during typical property walkthroughs or standard inspections.

What Counts as Latent Defects

Latent defects hide behind walls, under flooring, in attics, or in other concealed locations. These problems exist but remain invisible to buyers conducting reasonable due diligence.

Examples include foundation cracks hidden by paneling, roof damage concealed by new paint, plumbing leaks inside walls, electrical problems behind drywall, or mold growth in enclosed spaces. Buyers cannot reasonably discover these issues without invasive testing or removal of building materials.

What Counts as Visible Defects

Visible defects appear obvious during a property inspection. Buyers bear responsibility for noticing problems they encounter during walkthroughs or that surface during professional inspections they arrange.

Peeling paint, cracked windows, sagging gutters, or stained ceilings typically qualify as visible. If a reasonable buyer walking through the property would notice the problem, sellers generally don’t face Johnson v. Davis liability for failing to volunteer information about it.

The line sometimes blurs. A visible water stain might signal hidden mold or structural damage. Smart buyers investigate warning signs rather than assuming visible problems reflect the full extent of issues.

What Sellers Must Disclose Before Closing

Florida sellers must affirmatively disclose known material defects before buyers are reasonably committed to completing the purchase. Waiting until late in the process—such as after inspection periods have run or after buyers have effectively committed to closing—supports claims that the seller violated their disclosure duties.

Actual Knowledge Triggers the Disclosure Duty

Sellers must disclose defects they know about. Actual knowledge means the seller personally observed the problem, hired contractors who reported it, received inspection reports documenting it, or otherwise learned about the defect through direct information.

Suspecting a problem might exist doesn’t create the same duty as knowing it exists. However, sellers who deliberately avoid learning about obvious red flags face potential fraud claims beyond basic Johnson v. Davis violations.

Sellers who know about serious past problems that were repaired—such as significant structural, roof, or plumbing issues—often must disclose both the prior defect and the repair work when those facts materially affect value and are not readily observable. Buyers deserve to know that foundation cracks existed even if contractors supposedly fixed them, because that history may materially affect how they view the property.

Timing Matters for Disclosure

Smart sellers disclose known problems upfront when listing properties. Early disclosure prevents accusations of concealment and allows buyers to make informed decisions about whether to pursue the purchase.

Some sellers provide written disclosure statements listing known defects. Others verbally inform buyers and agents about problems. Either method works if the disclosure happens before buyers commit.

How Johnson v. Davis Applies to As-Is Contracts

Many Florida property sellers include “as-is” clauses stating they make no warranties about the property’s condition. However, these provisions don’t eliminate Johnson v. Davis disclosure duties for known material defects.

As-Is Clauses Address Repair Obligations

As-is contracts mean sellers won’t make repairs or provide warranties about property condition. Buyers accept the property in its current state at closing. These clauses generally mean sellers have no contractual duty to repair or warrant against defects they genuinely don’t know about, although other legal theories may still apply in some situations.

However, as-is language doesn’t permit hiding known problems. Florida courts consistently rule that Johnson v. Davis disclosure duties survive as-is provisions. Sellers who know about material defects must disclose them even when contracts say “as-is.”

Buyers Still Have Rights Despite As-Is Language

Buyers who discover that sellers have concealed known material defects may pursue remedies despite having signed as-is contracts. The as-is clause addresses warranty obligations, not disclosure duties imposed by Florida law.

This distinction confuses many property buyers and sellers. Reading “as-is” in a contract doesn’t mean sellers may hide foundation cracks, roof leaks, or mold problems they know about.

When Buyers Invoke Johnson v. Davis to Challenge Transactions

Buyers who discover undisclosed defects face different options depending on when they learn about problems. Timing affects available remedies and strategies for addressing seller failures to disclose.

Discovering Defects Before Closing

Buyers who uncover undisclosed defects during the contract period may invoke inspection or other contract contingencies to cancel the contract and seek the return of their earnest money deposit. When the seller’s nondisclosure violates Johnson v. Davis and the contract supports cancellation, buyers may walk away without forfeiting the deposit.

Buyers might also renegotiate the purchase price to account for repair costs, demand that sellers fix problems before closing, or request credits at closing to cover future repairs. Leverage increases when sellers clearly violated disclosure duties.

Discovering Defects After Closing

Buyers who find undisclosed defects after closing face more complex situations. They already own the property and must decide whether pursuing claims against the seller justifies the cost and effort.

Post-closing remedies might include demanding compensation for repair costs, pursuing rescission to unwind the sale entirely, or seeking damages for diminished property value. Success depends on proving the seller knew about the defect before closing and intentionally concealed it.

Florida law requires sellers to disclose material defects, and violations may support buyer claims even after transactions close. However, litigation costs may make smaller undisclosed defects impractical to pursue through court proceedings.

Proving a Seller Knew About Defects

Buyers claiming Johnson v. Davis violations must prove sellers had actual knowledge of undisclosed defects. Evidence matters significantly in these disputes.

Types of Evidence That Establish Seller Knowledge

Documentation often proves what sellers knew and when they knew it. Prior inspection reports, contractor estimates, repair invoices, insurance claims, and correspondence about problems demonstrate seller knowledge.

Witness testimony from contractors, prior owners, neighbors, or insurance adjusters who discussed defects with sellers helps establish knowledge. Real estate agents sometimes remember conversations where sellers mentioned problems.

Physical evidence matters too. Multiple repair attempts suggest sellers knew about ongoing issues. Professional inspections revealing defects that existed for years indicate sellers likely knew about them.

Challenges Buyers Face With Proving Seller Knowledge

Sellers who carefully avoid creating paper trails make proving knowledge difficult. A seller who notices a roof leak but never hires contractors or files insurance claims leaves less evidence of their knowledge.

Timing questions arise frequently. Did the defect exist before the sale, or did it develop after closing? Buyers must show the problem existed when sellers owned the property and that sellers knew about it then.

Common Hidden Defects in Florida Properties

Florida’s climate and construction practices create specific types of latent defects that sellers may fail to disclose. Understanding common problems helps buyers recognize warning signs.

Chronic water intrusion from hurricanes, thunderstorms, or high humidity causes hidden damage. Sellers might paint over water stains, replace damaged drywall without addressing underlying leaks, or conceal mold remediation without fixing moisture sources.

Foundation issues plague many Florida properties that are built on sandy soil. Cracks, settling, or shifting foundations hide behind finished walls and landscaping. Sellers who notice doors sticking, floor unevenness, or wall cracks know these symptoms often indicate foundation problems.

Termite damage and wood rot silently destroy Florida structures. Sellers who previously treated infestations or observed termite evidence must disclose these facts even after exterminators supposedly eliminated the problem.

Sinkholes and sinkhole activity affect numerous Florida properties, particularly in central Florida counties. Sellers who know about sinkhole investigations, remediation, or insurance claims must disclose this information given the significant threat sinkholes pose to property value and safety.

Plumbing problems, including polybutylene pipes, Orangeburg sewer lines, or cast iron drain failures, eventually cause major damage. Sellers who are aware of pipe material problems or past plumbing failures must inform buyers about these conditions.

Choosing the right legal support can make a significant difference in a real estate transaction. Read our guide on hiring a real estate lawyer to learn what to look for and how to avoid common mistakes.

How Undisclosed Defects Affect Earnest Money Deposits

Buyers who discover material undisclosed defects during the contract period may invoke these failures to justify canceling and recovering their earnest money deposit. Contract contingencies for inspections interact with Johnson v. Davis duties.

Sellers who materially breach disclosure duties may face serious challenges if they try to claim buyers’ earnest money deposits. When a court or arbitrator finds that a seller intentionally hid material defects and the contract supports cancellation, the decision may include returning some or all of the deposit to the buyer.

Disputes over undisclosed defects sometimes lead to negotiated deposit splits or price reductions rather than cancellation. Buyers and sellers may compromise when litigation costs would exceed the value in dispute.

FAQ for Johnson v. Davis in Florida

Does Johnson v. Davis apply to commercial property sales in Florida?

The Johnson v. Davis duty applies to all forms of real property according to the Florida Supreme Court’s decision, though courts most frequently apply it in residential transactions. Commercial property sales typically involve more sophisticated parties with greater resources for due diligence, leading to different practical expectations. However, commercial buyers might pursue fraud or misrepresentation claims when sellers conceal known material defects.

What happens if a seller honestly didn’t know about a defect?

Johnson v. Davis requires disclosure of known defects, so sellers without actual knowledge generally don’t face liability under this standard. However, sellers who deliberately avoid learning about obvious problems might face fraud claims. Buyers must prove the seller actually knew about the undisclosed defect to prevail on Johnson v. Davis claims.

How long after closing may buyers pursue claims for undisclosed defects?

Florida’s statute of limitations for fraud claims is typically four years from when the fraud was discovered or should have been discovered through reasonable diligence. Contract claims often face different limitation periods. Buyers who delay pursuing known undisclosed defect claims risk losing their legal rights as time passes.

Must sellers disclose defects they fixed before listing the property?

Sellers who know about serious past problems that were repaired—such as significant structural, roof, or plumbing issues—often must disclose both the prior defect and the repair work when those facts materially affect value and are not readily observable. The quality of repairs, whether problems might recur, and property history all matter to informed purchase decisions.

Do home inspections eliminate the seller’s duty to disclose defects?

Sellers must disclose known material defects regardless of whether buyers hire inspectors. Home inspections supplement seller disclosures but don’t replace them. Inspectors might miss defects the seller deliberately concealed or that hide in areas inspectors don’t examine. The Johnson v. Davis duty exists independently of inspection contingencies.

Get Clear Answers About Florida Property Disclosure Duties

Johnson v. Davis Florida law protects buyers from sellers who hide material property defects. Whether you just discovered problems the seller never mentioned or you’re preparing to sell and wondering what you must disclose, understanding these duties prevents costly disputes and legal problems.

Attorney Carlos M. Amor handles undisclosed property defect cases and real estate contract disputes throughout Florida. He focuses on regular people and small businesses navigating complex property transactions. His more than fifteen years of real estate law experience helps clients understand their disclosure obligations and pursue remedies when sellers violate Johnson v. Davis duties.

The Law Office of Carlos M. Amor, PA, offers free consultations by phone, video meeting, or in person at the Plantation, Florida office. Call 954-453-7200 today to discuss your situation. Don’t let confusion about disclosure requirements put your property rights at risk—experienced legal guidance helps you address undisclosed defect problems or fulfill your obligations as a seller.