Tom is a Minnesota licensee acting as a facilitator in a residential sale between a buyer and a seller. During the transaction, Tom discovers that the seller's property has a history of basement flooding that the seller has not disclosed. Under Minnesota law, what is Tom's obligation regarding this information?
Correct Answer
D) Tom must disclose the flooding history to the buyer because it is a known material fact
Under Minn. Stat. Ch. 82, even though a facilitator is not an agent and owes no fiduciary duties, a facilitator is still required by Minnesota law to disclose known material facts that could adversely affect the buyer. A history of basement flooding is a known material fact that directly affects the property's condition and value. The facilitator's limited duties do not eliminate the statutory obligation to disclose material facts to all parties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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.
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