Tennessee affiliate broker Sandra represents the Garlands as their seller's agent. A buyer submits an offer through his own buyer's agent. The buyer's agent tells Sandra privately that her client has recently received a competing job offer in another city and may not close if that job comes through. Sandra does not tell the Garlands about this information. Later, the buyer backs out citing the job relocation. Did Sandra breach a fiduciary duty to the Garlands?
Correct Answer
C) Yes, because Sandra had a duty to disclose all material facts that could affect the transaction to her seller clients
Under Tenn. Code Ann. § 62-13-401 et seq., a seller's agent owes the seller the fiduciary duty of disclosure of all material facts relevant to the transaction, including facts about the buyer's ability or likelihood to close. The buyer's potential job relocation and resulting uncertainty about closing is material information that could affect the Garlands' decision to accept the offer, negotiate a backup contract, or continue marketing the property. Sandra should have disclosed this to the Garlands.
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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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