Broker Rachel is acting as a dual agent in a Fort Collins transaction, representing both the seller and the buyer with proper written consent from both parties. The seller tells Rachel in confidence that the basement has experienced minor flooding that was never repaired. What is Rachel's correct course of action under Colorado law?
Correct Answer
B) Disclose the flooding issue to the buyer because it is a known material defect
Even in a dual agency relationship, a broker has a statutory duty to disclose known material defects to all parties. Under Colorado's Seller's Property Disclosure Act (C.R.S. § 38-35.7-101 et seq.) and the broker's duties under C.R.S. § 12-10-401 et seq., known material defects — such as unrepaired basement flooding — are never protected by confidentiality. The duty to disclose material defects overrides the general duty of confidentiality in dual agency.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
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