Tom is a licensed salesperson in Myrtle Beach representing the seller in a residential transaction. The seller, Carol, tells Tom that she is aware of a significant foundation crack but instructs him to omit it from the Property Condition Disclosure Statement to avoid scaring off buyers. Tom complies and the disclosure is delivered without mentioning the foundation issue. If the buyer later discovers the defect, what is the most likely consequence for Tom under South Carolina law?
Correct Answer
B) Tom may face disciplinary action by SCREC and potential civil liability for participating in the fraudulent disclosure
Under S.C. Code Ann. §§ 27-50-10 et seq. and SCREC regulations, a licensee who knowingly participates in concealing a known material defect from a buyer may face disciplinary action by the South Carolina Real Estate Commission, including license suspension or revocation, as well as civil liability. Agents have an independent duty not to assist in fraudulent misrepresentation. Following a client's instruction to omit a known material defect is not a defense — it is a violation of both the License Law and the Disclosure Act.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.
Death on property disclosure addresses whether sellers must inform buyers about deaths that occurred on the property, including natural deaths, suicides, and murders. Requirements vary significantly by state.
Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
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