A past sinkhole claim or foundation repair does not stop a Central Florida house from being sold, but it does change what the seller must say and what a careful buyer will ask for. Florida has a specific statute on paid sinkhole claims, a recording system for engineering reports, and a long-standing court rule on disclosing known defects. This post explains each in plain terms, from the point of view of both the seller and the buyer.
We connect Orlando-area homeowners with independent Florida-licensed contractors for free, no-obligation foundation repair quotes. The contractor you choose quotes, contracts and does the work. This is general information, not legal advice.
The statute: disclosing a paid sinkhole claim
Section 627.7073(2)(c) of the Florida Statutes says: "The seller of real property upon which a sinkhole claim has been made by the seller and paid by the insurer must disclose to the buyer of such property, before the closing, that a claim has been paid and whether or not the full amount of the proceeds was used to repair the sinkhole damage."
Read closely, the rule has three parts:
- Who it applies to: a seller who made a sinkhole claim on that property that the insurer paid.
- When: before the closing.
- What: that a claim was paid, and whether or not the full amount of the proceeds went to repairing the sinkhole damage.
That second point matters to buyers. A paid claim where the money went into an engineered stabilization is a different situation from one where only part of it was spent on repairs. The statute does not tell the seller how to document this, so sellers usually gather the repair contract, permit records and engineering reports to support what they disclose.
Recorded reports with the county clerk
Sinkhole claims leave a public paper trail. Under §627.7073(2), the insurer files the engineering and geology report for a paid claim with the county clerk of court for recording. The statute also states that recording is not a lien or a title defect on the property (§627.7073(2)(a)). A buyer or title company may find the report in the public records, but its presence does not, by itself, cloud the title.
If the policyholder commissioned a separate sinkhole report, the statute says it must be filed before the policyholder accepts payment (§627.7073(2)(b)). After stabilization or foundation repairs for a verified sinkhole loss, §627.7073(3) adds another record: "the professional engineer responsible for monitoring the repairs shall issue a report ... and certifies ... that such repairs have been properly performed," and files it "with the county clerk of the court, who shall record the report and certification." For a seller, that completion report is often the single most useful document to have ready.
The broader duty to disclose: Johnson v. Davis
The sinkhole statute is not the only rule in play. In Johnson v. Davis (Fla. 1985), the Florida Supreme Court held that "where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer." That duty can reach known foundation problems, past repairs and unresolved settlement, whether or not an insurance claim was ever made.
How that duty applies to a particular sale, and what goes on a disclosure form, depends on the facts of that sale, and this post does not answer it. This is general information, not legal advice.
Permits and the paper trail
Orange County warns that "work completed without a permit that is discovered by a home inspector or title company may affect your ability to obtain homeowner's insurance, prevent the sale of your home." Structural foundation repairs there need a permit, and plans must be signed and sealed by a Florida professional engineer or registered architect when repairs affect structural stability. Other jurisdictions' rules vary, and the licensed contractor confirms and pulls any permit. Our Orange County permit guide has the details.
Documents a seller may want to gather before listing:
- The insurer's engineering or geology report and any neutral evaluation report.
- The repair contract, including the contractor's Florida license number.
- The permit, approved plans and final inspection.
- The engineer's completion report and certification, if the repair followed a verified sinkhole loss.
- Any written warranty, and the contractor's terms on whether it transfers to a new owner.
Why buyers commission their own engineer or geologist report
A recorded report describes the house at the time it was written. A buyer wants to know its condition now and has no say in who wrote the seller's reports. There are also limits on who can answer the question. The Florida Geological Survey (FGS) says "there is no agency with responsibility or authority for sinkhole inspections in Florida," that "licensed home inspectors and insurance adjustors are not trained nor qualified to determine if there is a sinkhole," and that "the expertise of a licensed professional engineer is required to determine if a structure is structurally safe."
So a buyer of a house with a sinkhole history may order a review by a Florida-licensed professional engineer (PE) or a professional geologist. Depending on the scope, that can mean reading the recorded reports and permit file, a floor-elevation survey and, where warranted, subsurface testing. National ranges are about $400 to $750 for a foundation inspection, $340 to $1,000 for a structural engineer's report (up to $3,000 for complex cases) and $500 to $3,000 for a geotechnical soil report (estimates, not quotes). A contractor's free evaluation is a sales estimate, not an engineering opinion. See inspections and engineer reports.
Questions buyers often ask the seller
- Was a sinkhole claim paid, and were the full proceeds used for repairs?
- Which method did the engineer design, and was it completed as designed? Our post on grouting and piers explains the methods.
- Is there a recorded engineer's completion report?
- Was the permit closed with a final inspection?
- Has there been any new cracking or movement since the repair?
Buyers should also ask an insurer what coverage is available for the property before closing. Florida law requires property insurers to cover catastrophic ground cover collapse and to offer broader sinkhole loss coverage for an added premium (§627.706(1)). Ask your insurer what your policy covers. This is general information, not legal or insurance advice; our post on Florida sinkhole insurance law has more.
If repairs are still needed before a sale
Sometimes a seller learns of cracking or settlement during listing or after a buyer's inspection. In that case the order of steps matters: a PE's evaluation of the cause, a design, written quotes from licensed contractors, a permit and a final record. Read about sinkhole and subsidence repair, or request free quotes to compare written proposals.
Frequently asked questions
Do I have to disclose a past sinkhole claim when selling in Florida?
If you made a sinkhole claim on the property and the insurer paid it, section 627.7073(2)(c) requires you to disclose to the buyer, before closing, that a claim was paid and whether the full proceeds were used to repair the sinkhole damage. Known material defects that are not readily observable may also need disclosure under Johnson v. Davis. This is general information, not legal advice.
Is a recorded sinkhole report a lien on the house?
No. Florida law has insurers file reports for paid sinkhole claims with the county clerk for recording, and section 627.7073(2)(a) states that the recording is not a lien or title defect. Buyers and title companies may still see the report in public records, which is why sellers often keep the repair, permit and engineer completion documents ready to share.
Should a buyer get their own engineer's report?
Many buyers do. A recorded report reflects conditions when it was written, and the Florida Geological Survey says only a licensed professional engineer can determine if a structure is structurally safe; home inspectors are not qualified to determine whether there is a sinkhole. National ranges for a structural engineer's report run about $340 to $1,000, or up to $3,000 for complex cases.