Agent Melissa is a licensed NH salesperson representing buyer clients who are purchasing a property. During the transaction, Melissa discovers that the seller's property has a failing septic system — a material defect that the seller has not disclosed. The seller's agent asks Melissa to keep this information confidential until after closing to avoid jeopardizing the deal. What is Melissa's correct course of action under NH agency law?
Correct Answer
B) Melissa should disclose the failing septic system to her buyer clients because she owes them a fiduciary duty to disclose all known material facts affecting the property
As a buyer's agent under RSA 331-A:25-b, Melissa owes fiduciary duties to her buyer clients, including the duty to disclose all known material facts that affect the property's value or the buyer's decision to purchase. A failing septic system is a known material defect. Melissa must disclose this information to her clients regardless of the seller's agent's request for confidentiality. Agreeing to conceal a material defect would also expose Melissa to liability under RSA Chapter 358-A (Consumer Protection Act) and could constitute a violation of her license law obligations.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
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