Colorado broker David represents seller-client Patricia in the sale of her home. Patricia instructs David not to tell any buyers that the property is located in a flood zone, claiming it will scare buyers away. What should David do?
Correct Answer
C) Refuse to follow the instruction and disclose the flood zone status because it is an adverse material fact
The duty of obedience in Colorado requires a broker to follow a client's lawful instructions — but only lawful instructions. Instructing a broker to conceal a known adverse material fact (flood zone status) from prospective buyers is an unlawful instruction because it would violate the broker's statutory duty to disclose adverse material facts and could constitute misrepresentation. Under C.R.S. § 12-10-407 and the CREC rules, David must disclose the flood zone status regardless of Patricia's instruction. The duty of obedience does not require compliance with instructions that violate the law.
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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.
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