Agent Gwen represents seller Howard in listing a Silver Spring property. Buyer Ivan, who has a signed buyer representation agreement with Agent Gwen, wants to purchase Howard's property. Gwen obtains written dual agency consent from both Howard and Ivan on the MREC-mandated form before showing Ivan the property. During the transaction, Howard tells Gwen he is facing foreclosure and must sell within 30 days. Under Maryland dual agency law, which of the following correctly describes Gwen's obligation regarding this information?
Correct Answer
A) Gwen must disclose Howard's foreclosure situation to Ivan because it is a material fact that affects the property's title and marketability
This is a critical distinction in Maryland dual agency law between confidential negotiating information and material facts affecting the property. A pending foreclosure is a material fact that affects the property's title and marketability — it is not merely a personal negotiating preference. Under Maryland law, a dual agent has a duty to disclose all known material facts about the property to both parties, and this duty supersedes the confidentiality obligation regarding negotiating strategy. The foreclosure could affect the seller's ability to convey clear title, making it a material fact that Gwen must disclose to Ivan regardless of Howard's wishes.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
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