Broker Walsh is the listing agent for seller Park's home in Vancouver, Washington. The transaction closes successfully. Three months after closing, a buyer discovers a latent defect — a deteriorating septic system — that Park had disclosed to Walsh before listing but that Walsh failed to include in the property disclosures. Under Washington law, which of the following best describes the potential consequences for Walsh?
Correct Answer
D) Walsh may face DOL disciplinary action and civil liability for failing to disclose a known material defect to the buyer.
Under RCW 18.86.040(2), a seller's agent is independently obligated to disclose to all parties any material facts known to the agent that are not apparent or readily ascertainable. Walsh had actual knowledge of the defective septic system and failed to disclose it. This breach of the statutory duty to disclose material facts exposes Walsh to DOL disciplinary action under RCW 18.85 and potential civil liability, including claims under the Washington Consumer Protection Act (RCW 19.86), which allows for treble damages and attorney fees.
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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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