Salesperson Tom at Harbor Realty in Massachusetts is acting as a dual agent with written consent from both the buyer and the seller. During the transaction, the seller privately tells Tom that there is a crack in the foundation that has been painted over and is not visible during a normal walkthrough. The seller asks Tom to keep this information confidential. What must Tom do under Massachusetts law?
Correct Answer
B) Tom must disclose the foundation crack to the buyer because it is a known material defect, regardless of the dual agency relationship
Under Massachusetts law, including MGL Chapter 93A and the duties imposed by 254 CMR 3.00, a licensee must disclose known material defects to a buyer regardless of the agency relationship. A hidden foundation crack is a material defect that could significantly affect the property's value and the buyer's decision. The duty to disclose known material defects is not overridden by the dual agency relationship or by the seller's request for confidentiality. Concealing this defect could also expose Tom to liability under Chapter 93A for deceptive conduct.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
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