Tennessee affiliate broker Nina represents seller Mark in the sale of his Knoxville home. During the inspection, the buyer's inspector discovers evidence of prior water intrusion in the basement that Mark had previously repaired and disclosed on the Property Condition Disclosure form. The buyer's agent asks Nina privately whether the repair was effective. Nina knows from Mark that the repair was only a temporary patch. Under Tennessee agency law, what must Nina do?
Correct Answer
B) Disclose the known material fact about the temporary nature of the repair to the buyer's agent
Under Tenn. Code Ann. § 62-13-401 et seq., a seller's agent owes all parties in the transaction the duty to disclose known material facts about the property. The temporary nature of the basement repair is a material fact that affects the property's value and the buyer's decision. Tennessee's agency law requires disclosure of known material facts even when the agent represents the seller, because the duty of honesty and material fact disclosure runs to all parties, not just the agent's client.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
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