Margaret is selling her lakefront home on Squam Lake in New Hampshire. The property is within 250 feet of the water. During the listing period, a buyer asks whether he can add a large paved parking area in the backyard closest to the lake. Margaret's agent knows the property is within the protected shoreland zone under RSA 483-B but says nothing, believing it is the buyer's responsibility to research zoning restrictions. After closing, the buyer discovers he cannot build the parking area due to impervious surface limits. Which of the following best describes the agent's liability?

Correct Answer

D) The agent may face disciplinary action and civil liability for failing to disclose a known material fact affecting the buyer's intended use of the property

Under RSA 483-B and NH real estate practice standards, a licensee who knows a property is within the 250-foot protected shoreland zone has an affirmative duty to disclose restrictions that materially affect the buyer's use of the property. Impervious surface limits within the shoreland zone are a known material fact. When the buyer specifically asked about adding a paved parking area, the agent's silence constituted a failure to disclose a known material restriction. This can result in disciplinary action by the NH Real Estate Commission under RSA 331-A and potential civil liability under RSA 358-A (Consumer Protection Act) for misrepresentation by omission.