Agent Morales has a listing agreement with seller Patterson in Virginia. During a showing, potential buyer Davis — who has no agent — asks Morales whether the home has ever had water damage. Morales knows the basement flooded twice in the past. Under Virginia law, what is Morales's obligation to Davis?
Correct Answer
B) Morales must disclose the known water damage to Davis because all parties in a Virginia transaction are owed disclosure of material facts.
Under Va. Code § 54.1-2130 and § 54.1-2132, even when a licensee represents only the seller, they owe all parties — including unrepresented buyers (customers) — the duty to disclose all known material defects affecting the property. Prior flooding in the basement is a material fact that could significantly affect Davis's decision. Morales must disclose it regardless of whether Davis is his client.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
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