During a Minnesota real estate transaction, licensee Karen is acting as a facilitator. She discovers that the property has a significant foundation crack that the seller has not disclosed. The seller asks Karen not to mention it to the buyer. What is Karen's most appropriate course of action under Minnesota law?
Correct Answer
B) Karen must disclose the foundation crack to the buyer because all licensees have a duty not to engage in fraud or misrepresentation
Even though Karen is a facilitator and not an agent, all Minnesota licensees — including facilitators — are prohibited from engaging in fraud, misrepresentation, or concealment of material facts under Minn. Stat. Ch. 82. Knowingly concealing a significant foundation crack at the seller's request would constitute misrepresentation. Karen's limited statutory duties as a facilitator still include an obligation to not participate in deceptive practices.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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