Real Estate Brokers are NOT Immune from Liability
Real estate brokers are NOT immune from liability when it comes to misrepresentations regarding the property they are selling. A recent Florida appellate opinion supports this point. See Dziegielewski v. Scalero, 47 Fla.L.Weekly D2608a (Fla. 5th DCA 2022). If you are a real estate broker, consider this, particularly if you are marketing a property with misrepresentative statements.
In this case, a condominium unit was listed for sale. The MLS listing for the property made a representation regarding garage spaces tied to the unit: “Not one or two, but three deeded garages come with this unit…” In actuality, the unit came with the exclusive right to use only one garage space. The broker was aware of this fact. Notwithstanding, the broker continued to market the unit as being tied to 3 garage spaces. A buyer ended up purchasing the condominium unit based on the representation that it came with the right to three exclusive garage spaces. The contract, however, provided that the seller could only guarantee title to one garage space. The seller asked the broker about this and the broker again responded it came with three spaces and a rider was entered that stated, “Seller’s rights and interest in or to the use of the following parking space(s), garage, and other areas are included in the sale of the Property and shall be assigned to Buyer at Closing, subject to the Declaration: Parking Space(s) #___Garage #19A Other: 9A and 11A.” After closing, the buyer learned she only had the exclusive right to one parking space and that the seller and broker were made aware of this fact.
The buyer filed a lawsuit against the broker and seller for fraudulent inducement and negligent misrepresentation. The trial court, however, dismissed the claims against the broker with prejudice, even though buyer wanted to assert a claim against the broker for violating her statutory duties. The appellate court held it was error for the trial court to dismiss the claims against the broker with prejudice, and it was error for the trial court to deny buyer’s right to assert additional claims.
First, an appellate court reviews a motion to dismiss based on a de novo standard of review:
Appellate courts review an order granting a motion to dismiss de novo. Review is confined to the four corners of the complaint. The allegations set forth in the complaint must be assumed to be true and all reasonable inferences arising therefrom are taken in favor of the plaintiff. Accordingly, for purposes of this appeal, we accept the well-pled allegations of the amended complaint to constitute the facts of this case.
Dziegielewski, supra (citation omitted).
Second, the buyer asserted viable claims against the broker to survive any motion to dismiss. And, buyer should have been allowed to amend to assert an additional claim against the broker relating to the broker’s alleged violation of her statutory duties:
Buyer argued both below and on appeal that she wishes to include a count against [broker] based on [broker’s] alleged violation of her duties under Chapter 475, Florida Statutes (2020). This court has previously held that Chapter 475 authorizes a private cause of action against a real estate broker for violation of statutory duties when the broker allegedly engaged in fraudulent concealment in conjunction with the sale of residential real property.
Dziegielewski, supra (citation omitted).
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
