A buyer and seller in Carroll County, Maryland, execute a purchase agreement on September 1st. The seller provides a Disclaimer Statement (as-is) under the Maryland Residential Property Disclosure and Disclaimer Act. The buyer does NOT rescind within the 5-day window. At settlement on October 15th, the buyer discovers that the property has a severe mold problem that the seller's agent was aware of but did not mention. The seller's agent argues that the disclaimer fully protects both the seller and the agent from any liability. Under Maryland law, which statement is most accurate?
Correct Answer
D) The disclaimer protects the seller from liability for unknown defects but does not shield the seller's agent from liability for failing to disclose a known material fact
Under Maryland law, the Disclaimer Statement protects the seller from liability for defects the seller did not know about, and it limits the seller's obligation to disclose known defects to some extent — but it does not protect the seller's agent from the agent's independent duty to disclose known material facts. Under the Maryland Real Estate Brokers Act and MREC regulations, a licensee has an affirmative duty to disclose material facts affecting the property's value or condition, regardless of whether the seller has chosen a disclaimer. The seller's agent who knew about the mold and failed to disclose it may face liability for misrepresentation and MREC disciplinary action, separate from any protection the disclaimer may afford the seller.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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