James is a Maryland licensee representing a buyer who is purchasing a farm property in Talbot County. A portion of the farm lies within the Chesapeake Bay Critical Area. The seller's disclosure statement does not mention the Critical Area. James discovers this fact during his due diligence review. What is James's most appropriate course of action?
Correct Answer
B) Disclose the Critical Area status to his buyer client and recommend that the buyer investigate the impact of Critical Area restrictions on the intended use of the farm.
James, as the buyer's agent, owes fiduciary duties to his buyer client, including the duty to disclose all known material facts. The fact that a portion of the farm lies within the Chesapeake Bay Critical Area is a material fact that could significantly affect the buyer's intended agricultural use of the property. James must disclose this information to his client and recommend further investigation to understand the specific restrictions that apply. This is consistent with the Maryland Real Estate Brokers Act and the Critical Area disclosure obligations.
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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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