Sales Associate Paula at Sooner Realty in Yukon, Oklahoma has a listing agreement with seller Ray. During a showing, buyer Sam (who is unrepresented) asks Paula whether the roof has ever leaked. Paula knows from her walkthrough that the roof has a history of leaking, but Ray has asked her not to mention it. Sam is not Paula's client. What is Paula's correct course of action under Oklahoma agency law?

Correct Answer

A) Paula must disclose the known roof leak history to Sam because it is a material fact, even though Sam is not her client.

Under Oklahoma agency law, a seller's agent owes the duty of honesty and disclosure of material facts to ALL parties in a transaction — not just to the agent's own client. A history of roof leaks is a material fact that could significantly affect Sam's decision to purchase. Paula may not withhold or misrepresent known material facts from Sam simply because Ray instructed her to do so. Following Ray's instruction to conceal a known defect would expose Paula to liability for misrepresentation and could constitute grounds for OREC disciplinary action.