Salesperson Amy works for Northwoods Realty in Wisconsin. She is showing a buyer client, Ben, a home listed by a competing brokerage. During the showing, Amy notices a large crack in the foundation that the seller's disclosure report does not mention. Ben does not ask about the foundation. What is Amy's obligation under Wisconsin law?
Correct Answer
B) Amy must disclose the crack to Ben because she owes him the duty to disclose material adverse facts as his buyer's agent
Under Wisconsin Administrative Code REEB 24 and Wisconsin Statutes Chapter 452, a buyer's agent owes the client the duty to disclose all material adverse facts that the agent knows or reasonably should know, regardless of whether the client asks. A large foundation crack is a material adverse fact that would significantly affect the value or desirability of the property. Amy must proactively disclose this to Ben without waiting to be asked.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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