Maria is a licensed real estate salesperson in Massachusetts. She is listing a commercial property where she has actual knowledge that the owner previously reported an underground oil storage tank leak to MassDEP under Chapter 21E. The seller instructs Maria to say nothing about the contamination to potential buyers. What is Maria's correct course of action?
Correct Answer
D) Disclose the known contamination to potential buyers, because concealing a known material fact violates MGL Chapter 93A and licensee duties.
Under MGL Chapter 93A and the licensee's duty to avoid deceptive practices, a real estate licensee who has actual knowledge of a material fact — such as a Chapter 21E oil release — must disclose that fact to potential buyers. Concealing known environmental contamination constitutes an unfair or deceptive act under Chapter 93A, exposing both the licensee and the seller to liability including double or treble damages. The fact that the release is on file with MassDEP does not eliminate the licensee's affirmative disclosure obligation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
HOA disclosure requires informing buyers about the existence, rules, fees, financial health, and restrictions of a homeowners association governing the property. This information helps buyers understand their obligations before purchase.
More Mandated Disclosures Questions
A buyer asks a Georgia licensee to interpret a FEMA flood zone map and determine whether the property is at risk of flooding. The licensee has no specialized training in flood mapping or hydrology. How should the licensee handle this request?
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A Georgia licensee representing the seller knows that the property experienced repeated sewage backups causing damage to the lower level. The seller instructs the licensee not to volunteer this information, arguing that the buyer can discover it through inspections. Under Georgia law, how should the licensee handle this situation?
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- → A buyer asks a Georgia licensee whether any registered sex offenders live near a property listed for sale. Under O.C.G.A. § 44-1-16, how should the licensee handle this inquiry?