An affiliate broker in Tennessee represents a seller who knowingly conceals a significant foundation crack from the buyer by not disclosing it on the Property Condition Disclosure form. After closing, the buyer discovers the defect. Under Tennessee law, which of the following best describes the potential consequence for the affiliate broker?
Correct Answer
B) The affiliate broker may face disciplinary action by TREC and potential civil liability for participating in the concealment of a known material defect
Under the Tennessee Residential Property Condition Disclosure Act and the Tennessee Real Estate Broker License Act (Tenn. Code Ann. § 62-13-312), a licensee who participates in or facilitates the concealment of a known material defect may face disciplinary action by TREC, including license suspension or revocation, as well as civil liability. Licensees have an obligation not to misrepresent or conceal material facts, which extends to the disclosure process.
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Related Topics & Key Terms
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Related Concepts
A stigmatized property is one that has an undesirable reputation due to events that occurred on the property or nearby, such as a murder, suicide, alleged haunting, or proximity to a registered sex offender. The stigma is psychological, not physical.
An as-is clause in a real estate contract states that the buyer accepts the property in its current condition without requiring the seller to make any repairs. However, an as-is sale does NOT eliminate the seller's obligation to disclose known defects.
Asbestos disclosure involves informing buyers about the presence of asbestos-containing materials (ACMs) in a property. Asbestos was commonly used in construction materials before 1980 and poses health risks when fibers become airborne.
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