A buyer purchases an agricultural property in the Tualatin Valley and discovers after closing that the property has a certificated water right for irrigation but the seller never mentioned it in the listing or the purchase agreement. The Oregon broker representing the buyer failed to ask about water rights. Which of the following best describes the broker's potential liability?
Correct Answer
B) The broker may have liability for failing to investigate and disclose a material fact affecting the property's value and use.
Oregon brokers have a duty to disclose material facts affecting a property's value or desirability to their clients. Water rights are a significant material fact for agricultural properties in Oregon, given the prior appropriation doctrine and the importance of water access for farming. A broker representing a buyer of agricultural land should investigate and inquire about water rights as part of their professional duty. Failure to do so could expose the broker to liability for failing to disclose a material fact under ORS 696.805.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The bundle of rights describes the rights associated with property ownership, allowing owners to use, control, enjoy, exclude others from, and dispose of the property.
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
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