A California listing agent discovers through their visual inspection that a property has a significant foundation defect. The seller instructs the agent to keep this information confidential and not disclose it to buyers. Which of the following best describes the agent's legal obligation?
Correct Answer
A) Disclose the defect to prospective buyers, because the duty to disclose known material facts overrides the seller's instruction
Under California Civil Code §2079, a listing agent has a statutory duty to conduct a reasonably competent visual inspection of the property and disclose all material facts affecting value or desirability to prospective buyers. This duty runs directly to buyers and cannot be waived or overridden by the seller's instructions. Additionally, Civil Code §1102 et seq. establishes mandatory Transfer Disclosure Statement requirements. Concealing a known material defect at the seller's direction exposes both the agent and seller to civil liability and potential license discipline under Business and Professions Code §10176.
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