A Massachusetts salesperson, Diane, is the listing agent for seller Robert. Robert instructs Diane to tell all prospective buyers that the property has never had any flooding issues, even though Robert has told Diane privately that the basement flooded twice in the past three years. Under Massachusetts law, what must Diane do?
Correct Answer
B) Disclose the flooding history to prospective buyers despite Robert's instructions, as this is a known material defect.
Under Massachusetts law, including MGL Chapter 93A and the fiduciary duty of disclosure, a licensee must disclose known material defects to buyers even if the seller instructs otherwise. The duty of obedience requires following the client's lawful instructions, but instructing a licensee to actively misrepresent or conceal a known material defect is an unlawful instruction. Diane must disclose the flooding history to prospective buyers to avoid violating Chapter 93A and her professional obligations under 254 CMR 3.00.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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