An Iowa listing agent, Kevin, represents seller Patricia in the sale of a residential property. Patricia tells Kevin that the basement has experienced water intrusion twice in the past two years but insists that Kevin not mention it to buyers because she had it 'fixed.' Patricia delivers a Seller Disclosure Statement that omits this history. A buyer, David, purchases the property and later discovers the recurring water problem. Under Iowa Code Chapter 558A and Iowa Code Chapter 543B, which of the following best describes Kevin's legal exposure?
Correct Answer
B) Kevin may face disciplinary action and civil liability because licensees have an independent duty to disclose known material facts that are not included in the seller's disclosure statement
Under Iowa Code Chapter 543B, real estate licensees owe a duty to all parties in a transaction to disclose known material facts that could affect the transaction, independent of the seller's disclosure statement obligations under Chapter 558A. Water intrusion history is a material fact that Kevin knew about. Knowingly allowing a materially incomplete disclosure to be presented to a buyer exposes Kevin to disciplinary action by the Iowa Real Estate Commission under Chapter 543B and potential civil liability. The seller's disclosure form does not insulate a licensee who has independent knowledge of a material defect.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Mandated Disclosures Question
Background Knowledge for Mandated Disclosures
Real World Application in Mandated Disclosures
Common Mistakes to Avoid on Mandated Disclosures Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
Flood zone disclosure requires informing buyers whether a property is located in a designated flood zone as mapped by FEMA. Properties in high-risk flood zones may require mandatory flood insurance.
HOA disclosure requires informing buyers about the existence, rules, fees, financial health, and restrictions of a homeowners association governing the property. This information helps buyers understand their obligations before purchase.
More Mandated Disclosures Questions
In Vermont, a client refuses to allow a disclosure the licensee believes is necessary. Which statement is correct?
In Vermont, unpermitted construction or septic work affects a Vermont property. Which statement is correct?
A Vermont licensee is asked about a seller's agent knows a serious property defect or limitation. What is the best answer?
In Vermont, a licensee markets a pre-1978 Vermont residential rental property. Which statement is correct?
In Vermont, a seller's agent knows a serious property defect or limitation. Which statement is correct?
- → In Vermont, covered pre-1978 property is shown to a buyer. Which statement is correct?
- → In Vermont, the property is subject to a right of first refusal. Which statement is correct?
- → A Vermont licensee is asked about unpermitted construction or septic work affects a Vermont property. What is the best answer?
- → An Oklahoma licensee is asked about a seller learns of a new defect after already delivering a disclosure or disclaimer statement. What is the best answer?
- → Which Oklahoma rule applies when a seller wants to use the Oklahoma disclaimer statement instead of a disclosure statement?
- → An Oklahoma licensee is asked about a seller of covered Oklahoma residential property is preparing for a buyer’s offer. What is the best answer?
- → In Oklahoma real estate practice, a seller has not yet accepted a purchaser’s offer. What should the licensee remember?
- → For the Oklahoma salesperson state portion, a disclosure statement is delivered after an offer to purchase has been made. Which statement is correct?
- → Which Oklahoma rule applies when a real estate licensee actually knows of a property defect that is not included in the seller’s disclosure statement?
- → In Oklahoma real estate practice, a newly constructed dwelling has never been occupied. What should the licensee remember?