Agent Brenda represents a seller in Jonesboro. During the transaction, Brenda discovers that the property has a foundation crack that the seller did not mention on the disclosure form. The seller instructs Brenda to say nothing about it to the buyer. Under Arkansas law, what is Brenda's correct course of action?
Correct Answer
B) Disclose the foundation crack to the buyer as a known material defect, regardless of the seller's instruction
Under the Arkansas Residential Property Disclosure Act (Ark. Code Ann. § 18-60-201 et seq.) and AREC rules, a licensee has an independent duty to disclose known material defects to all parties, regardless of the client's instructions to conceal them. A foundation crack is a material defect that could significantly affect the property's value and safety. Brenda's duty to disclose known material facts to the buyer supersedes the seller's instruction to remain silent. Following the seller's instruction to conceal a known defect would expose Brenda to disciplinary action, license revocation, and civil liability.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
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.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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