New York Real Estate Salesperson ExaminationBrokerage and Salesperson ResponsibilitiesMedium
A real estate salesperson is working as a buyer's agent for a client. The salesperson discovers a significant structural defect in a property during an independent inspection that the seller's agent is unaware of. What is the salesperson's primary ethical and legal obligation regarding this discovery in New York?
- AKeep the information confidential to avoid jeopardizing the deal for their client.
- BWait for the seller's disclosure statement to see if the defect is mentioned.
- CInform their buyer client immediately and advise them on next steps.
- DInform the seller's agent immediately so they can address the issue.
Show answer & explanationAnswer & explanation
Correct answer: C. Inform their buyer client immediately and advise them on next steps.
As a buyer's agent, the salesperson has a fiduciary duty of disclosure to their client. This means they must inform their buyer client of all material facts that could influence the client's decision, especially a significant structural defect. Advising on next steps, such as further inspection or renegotiation, is also part of their duty.
Why the other options are wrong
- A. Withholding material information from a client is a breach of fiduciary duty.
- B. Waiting for the seller's disclosure is a passive approach and does not fulfill the immediate duty to disclose material facts to the client.
- D. While the seller's agent may eventually need to know, the primary duty is to the buyer client first.
Fiduciary Duty of Disclosure (Buyer's Agent)
A buyer's agent must disclose all material facts known to them, which could influence the client's decision, to their buyer client.
- Mandatory for all material facts.
- Protects the client's best interests.
- Applies immediately upon discovering the fact.
Memory trick: A buyer's agent sees all, tells all to their client.