Marcus is a licensed Indiana broker representing a seller. The seller completed the Indiana Seller's Residential Real Estate Sales Disclosure Form but failed to mention a known water intrusion issue in the basement. Marcus is aware of the water problem from his walkthrough of the property. The seller instructs Marcus to remain silent about it. What is Marcus's obligation under Indiana law?
Correct Answer
B) Marcus must disclose the known water intrusion issue to prospective buyers regardless of the seller's instructions
Under Indiana law, including IC 25-34.1 and the Indiana Seller Disclosure Act (IC 32-21-5), a licensed broker has an independent duty to disclose known material facts that affect the value or desirability of the property to all parties. A broker cannot follow seller instructions that require concealing known material defects. The water intrusion issue is a material fact, and Marcus must disclose it to prospective buyers.
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Related Topics & Key Terms
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Related Concepts
Death on property disclosure addresses whether sellers must inform buyers about deaths that occurred on the property, including natural deaths, suicides, and murders. Requirements vary significantly by state.
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.
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