Colorado broker Elena is working with buyer clients, the Garcias, who are interested in purchasing a rural property in Weld County. The property listing states that water is supplied by an irrigation ditch company. During negotiations, Elena learns that the seller's water rights have a junior priority date and may be curtailed during drought years. What is Elena's disclosure obligation regarding this information?
Correct Answer
A) Elena must disclose this material information about the water rights priority to the Garcias, as it directly affects the property's value and use
Under Colorado's prior appropriation doctrine (C.R.S. § 37-92-101 et seq.) and CREC disclosure rules, water rights are a material fact in Colorado real estate transactions — especially for rural and agricultural properties. A junior priority date that risks curtailment during drought directly affects the property's value and usability. Elena, as the buyer's broker, has an affirmative duty to disclose all known material facts to her clients, including water rights status and priority.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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