Legal Questions About Short Sales

Written by admin on 04 July 2009

from Florida Realtor Magazine, January 2009 | page 11The increase in the number of short sales throughout the state prompted two legal questions. FAR’s General Counsel Randy Schwartz responds:

If a real estate licensee lists a property at a below-market-price that he knows the seller probably won’t accept, is the licensee in violation of Florida real estate license law?

A violation of the Florida real estate license law is a matter to be determined by the Florida Real Estate Commission, however, FAR attorneys believe that, if a licensee lists a property for a price the licensee and the seller know is not acceptable, a case of misrepresentation and false advertisement can be made under Chapter 475.25(1)(c) Florida Statutes. It would not make any difference if the listing indicated that the selling price was subject to a third party lender or not; it is more a matter of advertising something that is known to be unacceptable.

Is the seller in violation of any law if he states he would sell a property at a certain price even though he knew it would not actually sell at that price?

FAR attorneys do not believe the seller would be violating any license law because Chapter 475, Florida Statutes, does not regulate the public.

However, Chapter 817, Florida Statutes, might come into play for the licensee and a member of the public. Whether the seller could be held accountable for civil damages, due to his or her misrepresentation, would be completely determined by the individual facts of the case.

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