A buyer purchases a waterfront property in Harford County without being informed by her agent that the property is located within the Chesapeake Bay Critical Area. After closing, the buyer discovers that her plan to install a large in-ground pool and expand the driveway is prohibited because the property has already reached the maximum impervious surface coverage allowed under the local Critical Area program. The buyer seeks to hold the agent accountable. Under Maryland law, which of the following is most accurate regarding the agent's potential liability?
Correct Answer
A) The agent may face disciplinary action by MREC and civil liability for failing to disclose a known material fact that affected the buyer's intended use of the property.
Under the Maryland Real Estate Brokers Act, Md. Code Ann., Bus. Occ. & Prof. § 17-322, a licensee who fails to disclose a known material fact that affects a buyer's decision to purchase may face disciplinary action by MREC, including license suspension or revocation. Additionally, the agent may face civil liability for damages suffered by the buyer as a result of the non-disclosure. The Critical Area status and the impervious surface limitation are material facts that directly affected the buyer's intended use of the property. If the agent knew or should have known about the Critical Area status, the failure to disclose it creates significant exposure to both regulatory and civil liability.
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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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