Broker Diane lists a property in Bend, Oregon. During the listing period, she discovers that the seller has been operating an unlicensed short-term rental in violation of local ordinances. The seller asks Diane not to disclose this to potential buyers. Under Oregon law, what is Diane's most appropriate course of action?
Correct Answer
B) Diane must disclose the ordinance violation to potential buyers because it is a material fact, and she cannot follow instructions that require her to violate Oregon law
Under Oregon real estate law and OREA rules, a licensee — even one acting as a seller's agent — cannot follow client instructions that require withholding material facts from buyers. A known ordinance violation affecting the property's legal use is a material fact that must be disclosed. Oregon's seller disclosure law (ORS 105.462–105.490) and the licensee's duty of honesty prohibit active concealment of material defects. Diane must disclose the violation or withdraw from the listing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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