Broker Theresa's salesperson, Paul, listed a property for Seller Olivia. During the listing period, Paul discovered that the property had significant undisclosed foundation issues that Olivia had not included in the property disclosure document. Olivia instructed Paul to say nothing to potential buyers, claiming the defects were minor. Paul, fearing he would lose the listing, remained silent when a buyer asked about the property's condition. Under Louisiana license law, which of the following most accurately describes Paul's legal and professional obligations and the consequences of his silence?
Correct Answer
C) Paul violated Louisiana license law by failing to disclose a known material defect to the prospective buyer; his duty to disclose known material defects overrides the seller's instruction to remain silent, and he may face LREC disciplinary action
Under Louisiana license law and LREC regulations, a licensee has an independent duty to disclose known material defects to prospective buyers, regardless of which party the licensee represents. This duty exists even when the licensee is acting as the seller's agent. A seller's instruction to conceal a known material defect is not a 'lawful instruction' — it is an instruction to violate the law. Paul's silence constitutes active concealment of a material defect, which violates his obligations under La. R.S. 37:1430 et seq. and may result in LREC disciplinary action including license suspension or revocation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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