Licensee Grace is a buyer's agent in Virginia. During a showing, she notices what appears to be fresh paint covering a large section of the basement wall, which could indicate an attempt to conceal water damage. Her buyer client, Mark, does not notice it. Under Virginia fiduciary law, what should Grace do?
Correct Answer
C) Point out the observation to Mark and recommend he have the area professionally inspected
Under Virginia agency law, a buyer's agent owes the client the fiduciary duty of disclosure, which requires the agent to inform the client of all material facts the agent knows or reasonably should know that could affect the client's decision. Va. Code § 54.1-2132 requires the buyer's agent to disclose information that could affect the client's interests. Grace's observation of potential concealed water damage is exactly the type of material information she must share with Mark, along with a recommendation to investigate further.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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