Connecticut salesperson Rachel is acting as a buyer's agent for the Nguyens. During due diligence, Rachel learns from a neighbor that the property's basement has flooded repeatedly during heavy rains, a fact not mentioned in the seller's disclosure report. Rachel does not inform the Nguyens of this information because she is worried it will kill the deal and reduce her commission. Which fiduciary duty has Rachel violated?
Correct Answer
B) Disclosure, by withholding a material fact that could affect the buyers' decision
Rachel violated the fiduciary duty of disclosure. Under Connecticut agency law, a buyer's agent must disclose all material facts known to the licensee that could affect the client's decision, including information learned from third parties such as neighbors. The repeated basement flooding is clearly a material fact. Rachel's motivation — protecting her commission — also constitutes a breach of the duty of loyalty, but the most direct duty violated by withholding a known material fact is disclosure.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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