Vermont licensee Beth is representing buyer Tom in the purchase of a lakefront property. During due diligence, Beth discovers that the property's septic system does not have a Vermont Wastewater System and Potable Water Supply permit and may not meet current state standards. Tom tells Beth he does not want to know about any problems because he loves the property and does not want to be discouraged. What must Beth do under Vermont agency law?
Correct Answer
B) Disclose the permit issue to Tom immediately, because her fiduciary duty of disclosure requires her to inform him of material facts regardless of his stated preference
Under Vermont agency law (26 V.S.A. Chapter 41) and VREC Rule 4.1, a buyer's agent owes the client a fiduciary duty of disclosure, which requires informing the client of all material facts relevant to the transaction. The absence of a required Vermont Wastewater System and Potable Water Supply permit is a significant legal and financial issue that constitutes a material fact. A client cannot waive the agent's duty to disclose material facts, and Beth must inform Tom regardless of his stated preference.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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