Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.
Fraud
Fraud in real estate is intentional misrepresentation or concealment of a material fact made to induce another party to act, causing reliance and damages, and exposing perpetrators to license discipline, civil liability, and criminal prosecution.
Exam context
Choose fraud when intentional deception on a material fact causes reliance. Negligent misrepresentation lacks intent. Failure to discover an unknown defect is not fraud unless the agent knew and hid it.
Elements of fraud
Courts look for a false statement or active concealment, knowledge of falsity or reckless disregard, materiality to the decision, justifiable reliance, and resulting harm. Opinions labeled as such and obvious exaggeration in advertising may be puffing rather than fraud, but silent omission of known defects can still be fraudulent.
License law consequences
Commissions revoke or suspend licenses for fraudulent inducement, commingling disguised as client funds, or falsifying documents. Agents must disclose known material defects and avoid steering buyers away from inspections. Mortgage fraud schemes involving straw buyers trigger federal enforcement separate from state real estate boards.
Examples
Foundation concealment
A seller paints over active foundation cracks and tells the buyer no structural issues exist despite engineer reports in the listing file. The buyer relies on the statement and later seeks rescission and damages for fraud.
Straw buyer scheme
An investor uses a nominee purchaser to obtain owner-occupant financing rates. Lenders and regulators treat the misrepresented occupancy intent as mortgage fraud.
Keep studying
Related terms
- Blind adMisleading advertising that can support discipline even without full fraud.
- Agency relationshipsFiduciary duties that heighten disclosure obligations to clients.
Related resources
- Free exam prep
Practice related licensing questions with instant feedback.
- Real estate glossary hub
Browse all published national glossary entries.
- Florida exam topic hub
Florida-specific explainers and question sets for this topic area.
Sources
- Cornell LII: fraud(Cornell Legal Information Institute)