Agent Kelly represents seller Bob in listing his home in West Jordan, Utah. During the listing period, Kelly discovers that the basement has a history of flooding that Bob did not mention in the listing agreement or the seller disclosure form. Bob instructs Kelly to say nothing about the flooding to potential buyers. What is Kelly's correct course of action under Utah law?
Correct Answer
B) Kelly must disclose the known flooding history to prospective buyers regardless of Bob's instructions
Under Utah Code Ann. § 61-2f-401 and the Utah Seller Disclosure Act (§ 57-27), a licensee has an independent duty to disclose known material defects to prospective buyers, even if the seller instructs otherwise. A history of basement flooding is a material defect that Kelly, having actual knowledge of it, must disclose. Kelly's duty to the public and to prospective buyers overrides the seller's instruction to remain silent. Following Bob's instruction to conceal this defect would expose Kelly to disciplinary action and potential civil liability.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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