Broker Nguyen at Lakeshore Realty represents seller Amanda White. Buyer client Robert Green, also represented by Broker Nguyen, makes an offer on Amanda's home. Both parties sign the dual-agency consent form. During the inspection, Robert discovers a crack in the foundation that was not disclosed. Amanda tells Broker Nguyen privately that she has known about the crack for two years but did not want to disclose it. Under Michigan law, what is Broker Nguyen's obligation?
Correct Answer
B) Disclose the known material defect to Robert immediately, because the duty to disclose material facts overrides dual-agency confidentiality
Under Michigan law, a dual agent — like any agent — has a non-waivable duty to disclose known material facts to all parties. The confidentiality obligation in dual agency protects negotiating positions and personal circumstances, but it does not shield material defects from disclosure. The Michigan Seller Disclosure Act (MCL 565.951 et seq.) and general agency law require that known material defects be disclosed. Broker Nguyen must inform Robert of the known foundation crack; failing to do so would constitute fraud and a violation of the Occupational Code.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
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