Johnson v. Davis

Supreme Court of Florida · 2020 · Property

480 So. 2d 625 (Fla. 1985)

Updated July 23, 2026

Propertycaveat emptorlatent defectsmaterial factsduty to disclosefraudfraudulent concealmentfraudulent misrepresentation

Facts

The Davises contracted to buy the Johnsons' three-year-old home for $310,000, paying a $5,000 deposit and later an additional $26,000 deposit. After seeing stains and damage near a window, Mrs. Davis asked about them, and the Johnsons told her the problems had been corrected and, according to the evidence the court credited, affirmatively repeated that there were no roof problems; the Davises then paid the additional $26,000. After a heavy rain, water entered through multiple parts of the home, and roofers hired by the Davises concluded the roof was inherently defective and only replacement would make it watertight. The Davises sued for rescission and return of their deposit, while the Johnsons claimed the deposit as liquidated damages.

Issue

Whether the sellers breached the roof-inspection provision by not providing a watertight roof before closing, and whether the sellers' statements and nondisclosure about known roof problems entitled the buyers to relief for fraud. The case also presented whether a home seller has a duty to disclose latent material defects not readily observable to the buyer.

Rule

A seller of a home who knows of facts materially affecting the value of the property that are not readily observable and are not known to the buyer has a duty to disclose them to the buyer; this duty applies to all forms of real property, new and used. In addition, actionable fraudulent misrepresentation requires (1) a false statement concerning a material fact, (2) knowledge that the representation is false, (3) intent that the representation induce another to act, and (4) consequent injury from reliance on the representation.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Tampa, Lena Ortiz agreed to buy a used townhouse from Victor and Mara Keene. Before closing, the Kees knew that sewage had repeatedly backed up into the downstairs bathroom because of a broken line under the slab, but the walls and floors showed no visible sign of the problem during ordinary inspection, and they said nothing.

If Lena later discovers the hidden sewage problem after closing and seeks relief based on the sellers' silence, which is the strongest argument in her favor?

Explanation. The majority held that a home seller who knows of facts materially affecting the value of the property, which are not readily observable and are not known to the buyer, has a duty to disclose them. The hidden sewage backup fits that rule. The opinion rejected the older no-duty approach for arm's-length residential sales.