New Jersey broker Samantha has been acting as a disclosed dual agent with written consent from both seller Robert and buyer Angela. During the transaction, Angela confides to Samantha that she has discovered through her own independent inspection that the basement has significant water intrusion that Robert did not disclose. Angela asks Samantha to keep this information confidential and use it only to negotiate a lower price. What must Samantha do under New Jersey law?
Correct Answer
A) Disclose the water intrusion to Robert because it is a known material defect affecting the property, regardless of Angela's request for confidentiality
This scenario presents a conflict between Angela's request for confidentiality and Samantha's duty to disclose material facts. Under New Jersey law, a dual agent — and indeed any licensee — has a duty to disclose known material defects affecting the property. Water intrusion in the basement is a material defect that affects the property's value and condition. This disclosure obligation is not overridden by a client's request for confidentiality, because the duty to disclose material property conditions is a legal obligation that cannot be waived by one party's instruction. Samantha must disclose the water intrusion to Robert.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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