Material facts include anything that would reasonably affect a buyer's decision: structural defects, environmental hazards, neighborhood nuisances, pending lawsuits, zoning changes, or death on the property. Failure to disclose material facts can result in lawsuits, license discipline, and contract rescission.
A seller's agent knows the basement floods during heavy rain. This is a material fact that must be disclosed to potential buyers, even if the seller instructs the agent not to mention it. The agent's duty to disclose overrides the seller's instruction.
Material fact disclosure trumps confidentiality. Even if a client says "don't tell them," agents MUST disclose material facts that affect health, safety, or property value. The only exception: facts specifically excluded by state law (like HIV/AIDS status in many states).
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Frequently Asked Questions
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