Tom and Linda are purchasing a remote cabin near Talkeetna, Alaska that is accessible only by floatplane. Their purchase and sale agreement does not mention the access limitation. After signing, Tom and Linda discover the property has no road access and that conventional mortgage financing is unavailable for fly-in-only properties. They want to rescind the contract. Which of the following best describes the licensee's obligation regarding access to this property under Alaska real estate practice?
Correct Answer
D) The licensee was obligated to disclose the fly-in-only access as a material fact affecting the property's use, value, and financing
Under Alaska real estate practice and 12 AAC 64, a licensee has an affirmative duty to disclose all known material facts that affect the value, use, or desirability of a property. Fly-in-only or water-access-only properties are a uniquely Alaska consideration. The absence of road access is a material fact because it directly affects the property's use, its insurability, and — as demonstrated here — the availability of conventional financing. Alaska's large inventory of remote, off-grid properties makes access type a recognized material disclosure item that licensees must proactively disclose.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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