Broker Ray in Oxford, Mississippi lists a home for seller Angela. During the listing period, Ray discovers that the home's foundation has a significant crack that was not disclosed to him by Angela and is not visible during a normal walkthrough. A buyer submits a full-price offer. Under Mississippi agency law, what is Ray's obligation regarding the foundation crack?
Correct Answer
B) Ray must disclose the material defect to the buyer even if doing so conflicts with the seller's wishes
Under Mississippi agency law (Miss. Code Ann. §73-35-21 et seq.) and the Mississippi Seller Disclosure Act (Miss. Code Ann. §89-1-501 et seq.), a licensee has a duty to disclose known material defects that could affect the buyer's decision to purchase, even when representing the seller. A significant foundation crack is a material fact. The fiduciary duty of loyalty to the seller does not override the licensee's legal obligation to disclose known material defects to the buyer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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