A licensee representing a seller learns that the seller has defaulted on their mortgage and that the lender has initiated foreclosure proceedings against the property. A prospective buyer asks whether there are any encumbrances or title issues affecting the property. What is the licensee's obligation under Ohio law?
Correct Answer
B) Disclose the foreclosure proceedings as a known material fact affecting title, even though the licensee represents the seller
Under Ohio Revised Code § 4735.67, licensees are required to disclose all known material facts that could affect a buyer's decision, regardless of which party the licensee represents. Active foreclosure proceedings are a material fact because they directly affect the property's title and the seller's ability to convey clear title. The duty to disclose material facts to all parties is not overridden by the duty of loyalty to the seller client.
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A brokerage practices designated agency. The broker discovers that the designated buyer's agent and the designated seller's agent, both affiliated with the same brokerage, have been sharing their respective clients' confidential information with each other during the transaction. Under Ohio law, who may face disciplinary consequences?