Broker James represents seller Patricia in the sale of her Bellevue home. During a showing, James notices that the basement has fresh paint over an area that appears to have had prior water damage. Patricia has not mentioned this in the listing. Under Washington's Law of Real Estate Agency (RCW 18.86), what is James's duty regarding this observation?
Correct Answer
A) James must disclose the potential water damage to buyers because the duty of disclosure to third parties overrides seller confidentiality for material defects.
Under RCW 18.86.040(1)(b), a seller's agent owes the seller a duty of disclosure, but RCW 18.86.040(2) also requires the seller's agent to disclose to all parties any material facts known to the agent that are not apparent or readily ascertainable. Known material defects — such as evidence of prior water damage — must be disclosed to buyers even when representing the seller. Washington's statutory framework explicitly creates this duty to third parties, and it is not overridden by the duty of confidentiality.
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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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