Tennessee affiliate broker Lisa represents the Changs in purchasing a home. After the contract is signed, Lisa learns from a neighbor that the property was the site of a methamphetamine lab three years ago, a fact not disclosed by the seller. The Changs have not asked about the property's history. Under Tennessee agency law, what is Lisa's obligation?
Correct Answer
D) Disclose the information to the Changs promptly because it is a material fact affecting the property
Under Tenn. Code Ann. § 62-13-401 et seq., a buyer's agent owes the duty of disclosure of all known material facts to the client, regardless of whether the client has asked. A prior methamphetamine lab is a material fact that could affect the property's value, habitability, and the buyer's decision to purchase. Lisa must proactively disclose this information to the Changs without waiting to be asked.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
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