New Jersey broker-salesperson Elena is working as a buyer's agent for Mr. and Mrs. Rivera. During the transaction, Elena discovers that the property has an unresolved municipal code violation that the seller did not disclose. The seller's agent asks Elena not to mention it to the Riveras so the deal does not fall apart. What must Elena do under her fiduciary duties in New Jersey?
Correct Answer
A) Disclose the code violation to the Riveras immediately, as her duty of disclosure to her clients overrides any request from the seller's agent
Elena's fiduciary duty of disclosure to the Riveras requires her to immediately disclose all material facts she discovers about the property, including the unresolved municipal code violation. A code violation is clearly a material fact that could affect the property's value, the buyers' ability to obtain financing, and their decision to purchase. No request from the seller's agent can override Elena's fiduciary obligation to her own clients. Concealing this information at the seller's agent's request would be a breach of Elena's duties and could also violate the New Jersey Consumer Fraud Act (N.J.S.A. 56:8-1 et seq.).
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
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