An Illinois licensee has actual knowledge of a latent physical defect in a listed property — one that a reasonably diligent buyer inspection would not uncover. The seller instructs the licensee to say nothing about it. What is the licensee's obligation under Illinois law?
Correct Answer
C) The licensee must disclose the defect because Illinois law requires disclosure of latent material adverse facts actually known to the licensee that a reasonably diligent inspection would not reveal.
Under the Illinois Real Estate License Act of 2000 (225 ILCS 454/15-25), a licensee has an affirmative duty to disclose to all parties any latent material adverse facts actually known to the licensee that could not be discovered by a reasonably diligent inspection. This duty exists independently of the seller's instructions and reflects the policy that buyers must be protected from hidden defects that the market cannot price without disclosure.
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Related Topics & Key Terms
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Related Concepts
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.
An as-is clause in a real estate contract states that the buyer accepts the property in its current condition without requiring the seller to make any repairs. However, an as-is sale does NOT eliminate the seller's obligation to disclose known defects.
Asbestos disclosure involves informing buyers about the presence of asbestos-containing materials (ACMs) in a property. Asbestos was commonly used in construction materials before 1980 and poses health risks when fibers become airborne.
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