Salesperson Mele is showing a leasehold property in Kailua to buyer Chen. Chen asks Mele whether the leasehold status of the property needs to be disclosed and whether it affects the agency relationship. Which of the following best describes Mele's disclosure obligations under Hawaii law?
Correct Answer
A) Mele must disclose the leasehold status as a material fact and provide the agency disclosure form if not already given
Under Hawaii law, leasehold status is a material fact that affects property value and must be disclosed by the licensee. Additionally, if the agency disclosure form has not yet been provided, Mele must provide it at or before this substantive discussion. Hawaii's unique prevalence of leasehold property makes this dual obligation — agency disclosure and material fact disclosure — particularly important. Licensees have an affirmative duty to disclose material facts regardless of whether the buyer asks.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
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