Tom is a Colorado licensed broker associate representing a seller in Adams County. During a walkthrough, Tom personally observes what appears to be staining consistent with a prior oil spill near the detached garage, though the seller has not mentioned it and the Seller's Property Disclosure form does not reference it. The seller insists there is nothing to disclose and instructs Tom to proceed with marketing. Under Colorado law, what is Tom's most appropriate course of action?
Correct Answer
C) Advise the seller that the observed staining is a potential material fact that may require disclosure, and if the seller refuses to address it, Tom may need to withdraw from the representation
Under Colorado license law (C.R.S. § 12-10-201 et seq.) and CREC rules, a broker associate has duties that include avoiding misrepresentation and not assisting a client in concealing material facts from buyers. Tom's personal observation of staining consistent with an environmental spill constitutes potential knowledge of a material fact. Tom must advise the seller that this condition may be a material fact requiring disclosure on the CREC Seller's Property Disclosure form. If the seller refuses to disclose a known or reasonably apparent material environmental condition, Tom faces a conflict between his client's instructions and his professional and legal obligations, and withdrawal from the representation may be necessary to avoid participating in a misrepresentation or omission that could harm buyers.
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Related Topics & Key Terms
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Related Concepts
A seller's disclosure statement is a form that sellers complete to inform buyers about the condition and history of the property, including known defects, past repairs, insurance claims, and environmental issues.
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
A stigmatized property is one that has an undesirable reputation due to events that occurred on the property or nearby, such as a murder, suicide, alleged haunting, or proximity to a registered sex offender. The stigma is psychological, not physical.
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Previous Question
Sandra is selling her home in Larimer County, Colorado. Three years ago, a licensed contractor confirmed the presence of mold caused by a slow roof leak; the leak was repaired and the mold was professionally remediated. Sandra believes the problem is fully resolved. When completing the CREC Seller's Property Disclosure form, Sandra tells her broker she does not need to disclose the past mold issue because it no longer exists. Which of the following best describes Sandra's disclosure obligation under Colorado law?
Next Question
Under Connecticut law, which statute requires a seller of residential property to complete and deliver a written property condition disclosure report to a buyer before a purchase contract is signed?