Missouri salesperson Diane is showing a home to buyer clients, the Petersons. During the showing, Mr. Peterson tells Diane he has noticed what looks like water staining on the basement ceiling and asks if this is a known issue. Diane is aware from her conversations with the listing agent that the seller disclosed a prior roof leak that was repaired two years ago. Under Missouri agency law, what is Diane's obligation to the Petersons?
Correct Answer
B) Diane must disclose the known information about the prior roof leak to the Petersons as part of her fiduciary duty of disclosure
As the Petersons' buyer's agent, Diane owes them a fiduciary duty of disclosure, which requires her to share all material information that could affect their decision to purchase the property. The prior roof leak—even if repaired—is material information that directly relates to the water staining the Petersons observed. Diane must disclose this known information to her clients. Withholding it would breach her fiduciary duty of loyalty and disclosure under Missouri agency law and could also implicate the Missouri Merchandising Practices Act.
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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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