An agent named Patricia is working with a seller whose property is located within the Chesapeake Bay Critical Area. The seller has not mentioned the Critical Area status in the listing. A prospective buyer, Kevin, asks Patricia at an open house whether the property has any special environmental restrictions. Patricia is unsure of the exact details but knows the property is near the Bay. What should Patricia do?
Correct Answer
B) Disclose that the property is near the Chesapeake Bay and may be subject to Critical Area restrictions, and recommend that Kevin investigate further before making an offer.
Maryland real estate agents have a duty to disclose known material facts and to avoid making misrepresentations. Because Patricia knows the property is near the Chesapeake Bay and may be subject to Critical Area restrictions—a material fact affecting property use and value—she must disclose this possibility and recommend that Kevin investigate further. She should not speculate on the extent of restrictions, but she cannot remain silent when she has reason to believe a material condition exists. This approach satisfies her disclosure duty without overstating facts she has not confirmed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
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