A few years ago, the Florida legislature adopted a new section in the Homeowners Association Act which required that prospective purchasers of property which is governing by a homeowners association must be provided with what is called a "Disclosure Summary." The form of the Disclosure Summary is included in the statute (and is available by clicking the link at the end of this article). Basically, the Summary is required to let the prospective purchaser know about various facts concerning the community they may be buying into. Information about assessments and developer rights is required to be included. The statute requires that the disclosure be supplied by the developer or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale is required to refer to and incorporate the disclosure summary and is required to include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the required disclosure summary.

The law provides that, if the summary is not given to the prospective purchaser before the contract is signed, the contract purchaser may cancel the contract at any time before closing or within three days of actually receipt of the summary, whichever occurs first.

Christine Morgan signed a contract to purchase a home in a community known as St. Andrews Park in St. Lucie County, Florida from a company known as Princeton Homes. The seller did not provide the disclosure summary as required by law. Roughly two years later, after the home was nearly complete, Ms. Morgan notified the seller that she intended to cancel the contract and demanded her deposit back. Princeton refused and a lawsuit ensued. Princeton claimed that, at the time they signed the contract to sell the property to Ms. Morgan, it was not the owner of the property and it was not the developer (Princeton was a builder and only bought properties from the developer after it had a contract from a buyer). Princeton claimed that it was not required to provide the disclosure because of those facts.

In Princeton Homes v Morgan 4D09-958 (Fla, 4th DCA, 2010), the court held that Ms. Morgan was entitled to the summary disclosure and whether it was Princeton's legal obligation to give it to her was irrelevant. If Princeton wanted to be sure the contract could not be canceled as provided by law, it should have made sure she got the disclosure whether it was their obligation to do so or not. Princeton argued that Ms. Morgan had actual knowledge of the matters which would have been included in the disclosure and that she should not be able to use the failure to receive the disclosure as a reason for cancelling the contract. The court held that the statute is clear that a buyer may not waive their right to the disclosure and that actual knowledge of what the disclosure might say does not cause a buyer the right to cancel the contract if the buyer did not get the disclosure.

Basically, what the Fourth District Court of Appeal (the court that hears appeals from counties including Palm Beach and Broward Counties) held was that the law is intended as a consumer protection statute and the court was not inclined to carve out exceptions which would deny buyers with the intended benefit of the law.

Those of you who may one day be sellers and those of you who are real estate agents will want to be sure that your buyers are provided with the required disclosures before they sign the contract or as soon after as possible. For those of you who are buyers who may have changed your mind after you signed the contract, this is an important case that supports your right to cancel if you did not receive the required disclosure.

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