A seller's agent learns that the seller is secretly adding a bathroom without permits but does not mention this to prospective buyers. If a buyer discovers the unpermitted work after closing, what type of claim could be brought against the agent?
Correct Answer
B) Fraud
Fraud is correct because the agent knowingly concealed a material fact — unpermitted construction — from prospective buyers to induce their reliance.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This General Principles Of Agency Question
Background Knowledge for General Principles Of Agency
Real World Application in General Principles Of Agency
Common Mistakes to Avoid on General Principles Of Agency Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
More General Principles Of Agency Questions
A listing agreement creates an agency relationship between:
A property manager screens a rental applicant using objective criteria including income, credit score, and rental history. The applicant is denied because his income is below the minimum threshold. Has the property manager violated fair housing laws?
In a real estate team structure, what is the role of the team leader?
A property management agreement between an owner and a property manager typically specifies which of the following?
What is 'designated agency' in the context of a real estate brokerage?
- → A real estate team receives a referral from a past client. The team leader assigns the referral to a team member. The team member shows the buyer several properties. Who is the buyer's agent?
- → A property manager receives a maintenance request from a tenant who reports a broken heater during winter. The property manager delays the repair for three weeks, and the tenant suffers property damage from frozen pipes. Who may be liable for the damages?
- → A real estate team consists of a team leader (licensed broker) and three licensed sales agents. A buyer contacts one of the team agents about a listing held by another team agent. What agency concern arises in this situation?
- → A property management company manages several apartment complexes. All of the following are typical duties of a property manager EXCEPT.
- → A real estate team is advertising its services. All of the following are generally required when a team advertises EXCEPT.
- → A commercial broker represents a landlord in leasing office space. During negotiations, the tenant discloses to the broker that she would pay up to $35 per square foot, even though the listed rate is $30. What must the broker do with this information?
- → A commercial property owner hires a broker to find a tenant for a 50,000 square-foot warehouse. The broker locates a suitable tenant and negotiates a 10-year lease. The owner pays the broker a commission based on the total lease value. What type of agency did the broker hold?
- → A commercial tenant is negotiating a five-year lease for retail space. The tenant hires a tenant representative broker to negotiate lease terms on the tenant's behalf. What agency relationship exists between the tenant and the tenant representative?
- → A commercial property manager is responsible for operating a shopping center. The manager must prepare an annual operating budget, negotiate vendor contracts, and handle tenant relations. In addition to management fees, the owner authorizes the manager to earn a leasing commission for each new tenant the manager brings in. Is this compensation structure permissible?
- → A property owner hires a licensed property manager to handle tenant screening, rent collection, and maintenance for a 20-unit apartment building. What type of agency relationship exists between the owner and the property manager?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam