A Virginia licensee, Tom, is representing the seller of a residential property. Tom discovers that the basement has a recurring water intrusion problem that the seller has not mentioned. Under Virginia law, what is Tom's obligation regarding this information?
Correct Answer
D) Disclose the water intrusion to prospective buyers as a material adverse fact
Under Virginia agency law, a licensee representing the seller still owes a duty of honesty and disclosure of material adverse facts to all parties, including buyers. Va. Code § 54.1-2131(B) requires a seller's agent to disclose known material adverse facts about the property's physical condition to the buyer, even when representing the seller. Water intrusion is a classic material adverse fact that must be disclosed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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