Patricia is a Tennessee affiliate broker who represents both the buyer and the seller in the same transaction with written informed consent from both parties. While representing both parties as a dual agent, the buyer privately tells Patricia that he has found a serious structural crack in the foundation that he believes the seller does not know about. What is Patricia's obligation under Tennessee agency law?
Correct Answer
B) Disclose the structural crack to the seller because it is a material fact about the property
Under Tennessee agency law (Tenn. Code Ann. § 62-13-401 et seq.), even in a dual agency relationship, the duty to disclose material facts about the property is non-waivable and runs to both parties. A structural crack in the foundation is a material defect that must be disclosed regardless of who discovered it. In dual agency, the confidentiality of negotiating positions is limited, but material property defects must always be disclosed to all parties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
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