Robert is a Colorado broker associate listing a home in Colorado Springs. During a walkthrough, he notices what appears to be mold growth behind a loose baseboard. The seller insists it is just discoloration from an old spill and asks Robert not to mention it to buyers. What is Robert's most appropriate course of action?
Correct Answer
B) Disclose the observed condition to prospective buyers because it may constitute a known material defect
Under Colorado's Seller's Property Disclosure Act (C.R.S. § 38-35.7-101 et seq.) and CREC regulations, a licensee who observes a condition that may constitute a material defect has an obligation to disclose it to prospective buyers. A broker cannot follow seller instructions that require concealment of potentially material information. The observed mold-like condition must be disclosed.
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