Michigan broker Pauline is acting as a dual agent in a transaction in Ann Arbor. Seller Greg tells Pauline that the basement has flooded twice in the past three years, but he does not want this disclosed to the buyer. What is Pauline's obligation under Michigan law?
Correct Answer
C) Disclose the flooding history to the buyer, because material defects cannot be withheld even in a dual agency relationship
Even in a dual agency relationship, a Michigan licensee cannot withhold known material defects from the buyer. Michigan's Seller Disclosure Act (MCL 565.951 et seq.) and the Michigan Occupational Code both require disclosure of known material defects. Recurring basement flooding is a material defect that affects the property's value and desirability. Pauline's duty to disclose material facts overrides the seller's instruction to conceal this information.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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