A California dual agent is handling a transaction where the buyer's home inspection reveals extensive termite damage. The seller knew about the termite issue but did not disclose it on the Transfer Disclosure Statement. The seller asks the dual agent not to say anything to the buyer about the pre-existing knowledge. What should the dual agent do?
Correct Answer
C) Inform the buyer that the seller had prior knowledge of the termite damage, as this is a material fact that must be disclosed
The seller's prior knowledge of termite damage is a material fact that directly affects the property's value and condition. Under California Civil Code §1102 (TDS requirements) and §2079.16 (dual agent duties), a dual agent must disclose known material facts to both parties. Confidentiality does not protect the concealment of material defects.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
More Laws Of Agency Fiduciary Duties Questions
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A broker who simultaneously represents the best interests of both opposing parties in a transaction is known as a(n):
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