Salesperson Mike represents buyer Olivia. During a showing, Mike notices that the seller's basement has visible mold and water stains, though this was not mentioned in the listing or the Property Condition Disclosure Statement. The seller's agent is not present. What is Mike's correct course of action under New Jersey agency law?
Correct Answer
D) Disclose the observed condition to Olivia immediately as a material fact affecting her decision
As Olivia's buyer's agent, Mike owes her the fiduciary duty of disclosure of all material facts. Visible mold and water stains are material facts that could significantly affect Olivia's health, the property's value, and her decision to purchase. Mike must immediately disclose what he observed to Olivia so she can make an informed decision, which may include requesting an inspection, renegotiating, or withdrawing from the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
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