Nevada broker Carmen lists a home for seller Mr. Walsh. During the listing period, Carmen discovers that the neighborhood where the home is located has been designated as a flood zone by FEMA, a fact that Mr. Walsh was unaware of. Mr. Walsh instructs Carmen not to mention the flood zone designation to any buyers. What must Carmen do under Nevada agency law?
Correct Answer
A) Disclose the flood zone designation to prospective buyers because it is a known material fact affecting the property's value
Under NRS 645.252(1), all Nevada licensees owe a duty to disclose known material facts that affect the value or desirability of a property to all parties, including buyers. A FEMA flood zone designation is a material fact that directly affects property value, insurance requirements, and financing eligibility. This disclosure duty cannot be overridden by the seller's instructions. Carmen must disclose the flood zone designation to prospective buyers regardless of Mr. Walsh's directive, as her statutory duty to disclose material facts runs to all parties in the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
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