Under Ohio law, Broker Perry's salesperson, Agent Reed, shows a property to a buyer client. Unknown to Reed, the property has significant termite damage that is concealed behind freshly painted walls. The buyer purchases the property and discovers the damage after closing. If the buyer sues, what is Broker Perry's potential liability?
Correct Answer
B) Potential vicarious liability if Reed had reason to suspect the defect but failed to investigate or disclose
Under ORC §4735.18, the broker may face vicarious liability if Agent Reed had observable indicators of the defect (such as fresh paint in unusual patterns) and failed to investigate or disclose. The agent's duty of reasonable care includes noting suspicious conditions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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