A seller completes a TDS for a property in Ventura County and discloses that the septic system was installed in 1990, but omits that the system overflowed last winter. The listing agent learned of the overflow during a conversation with the seller prior to listing. The buyer purchases the property and later discovers the septic history. Which of the following best describes the potential liability?
Correct Answer
C) Both the seller and the listing agent may be held liable, because each had independent knowledge of a material fact that was not disclosed to the buyer
Under Cal. Civil Code §1102, sellers are required to disclose all known material facts on the TDS. The septic overflow is a material defect the seller knew about and omitted. Separately, under Cal. Civil Code §1102.6 and the agent's statutory duty of honest dealing, a listing agent who has actual knowledge of a material fact — regardless of how that knowledge was acquired — must disclose it to the buyer. Because both parties had independent knowledge and failed to disclose, both may be held liable.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Megan's Law requires states to make information about registered sex offenders available to the public. Some states require real estate agents to inform buyers about the availability of sex offender registries.
Mold disclosure involves informing buyers about the presence of mold or conditions that are conducive to mold growth in a property. While no federal mold disclosure law exists, many states require disclosure of known mold issues.
A property condition disclosure is a written statement by the seller detailing the known condition of the property, including defects, repairs, and issues with major systems. Most states require sellers to complete this form.
More Practice Of Real Estate Disclosures Questions
At a DRE administrative disciplinary hearing in California, what standard of proof must the Department meet to sustain a finding against a licensee?
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Under California law, how often must a broker reconcile the trust account?
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Previous Question
A listing agent in California is preparing to complete the agent visual inspection section of the TDS for a property in Stockton. The home has a locked crawl space under the house that is not accessible without tools. Under Cal. Civil Code §2079, is the agent required to inspect this crawl space?
Next Question
Under California law, the listing agent has a duty to conduct a visual inspection of the property and report findings on the TDS. All of the following are within the scope of the agent's visual inspection duty EXCEPT: