Robert is a licensed salesperson in Alabama representing a seller. After the seller completes the disclosure form, Robert learns from a neighbor that the property's HVAC system has a known carbon monoxide leak that the seller did not disclose. The seller denies any knowledge of the issue and instructs Robert not to mention it to buyers. What is Robert's most appropriate action under Alabama law?

Correct Answer

B) Disclose the carbon monoxide concern to prospective buyers and advise the seller to have the system professionally inspected and update the disclosure form if warranted

Under Alabama agency law (Code of Alabama §34-27-81 et seq.), AREC administrative rules (Alabama Administrative Code Chapter 790-X), and the Alabama Seller Disclosure Act (Code of Alabama §6-9-142), a licensee who has knowledge of a potential material defect — particularly one involving health and safety such as a carbon monoxide leak — has an independent duty to disclose that information to prospective buyers, even if the seller denies knowledge or instructs the agent not to disclose. A seller's instruction to conceal a known material health-and-safety defect does not override the agent's statutory and ethical disclosure obligations. Robert must disclose the concern to buyers and advise the seller to address the issue professionally. Failure to do so could constitute a violation of AREC rules and grounds for license discipline.