New York Real Estate Salesperson ExaminationNew York State Specific Laws and RegulationsMedium
A real estate salesperson in New York is preparing to show a property to a buyer client. The property is located in a community that has a restrictive covenant limiting occupancy to residents 55 years of age or older. What is the salesperson's ethical and legal obligation regarding this information?
- AThe salesperson must advise the buyer to seek legal counsel to determine the validity of the covenant.
- BThe salesperson must disclose the age restriction to the buyer client immediately.
- CThe salesperson should only disclose the restriction if the buyer expresses interest in purchasing the property.
- DThe salesperson should avoid mentioning the restriction to prevent steering or discrimination concerns.
Show answer & explanationAnswer & explanation
Correct answer: B. The salesperson must disclose the age restriction to the buyer client immediately.
Under the duty of disclosure, a salesperson must inform their client of all material facts that could influence the client's decision. An age restriction is a material fact, and while 55+ communities are generally permissible under Fair Housing laws, the client needs to be aware of such restrictions before proceeding.
Why the other options are wrong
- A. While seeking legal counsel is always a good recommendation, the initial duty is for the salesperson to disclose the known material fact to the client.
- C. Delaying disclosure until interest is expressed could lead to wasted time and potential legal issues for the buyer and agent.
- D. Failing to disclose a legitimate and legal age restriction would be a breach of the agent's fiduciary duty of disclosure to their client. 55+ communities are generally exempt from familial status discrimination under federal Fair Housing laws if they meet specific criteria.
Disclosure of Material Facts (Age Restrictions)
Real estate licensees must disclose all material facts to their clients, including legitimate age restrictions (e.g., 55+ communities), as it impacts the client's eligibility and use of the property.
- Age restrictions are material facts.
- Must be disclosed to client.
- Impacts buyer's eligibility/use.
Memory trick: Any property 'No-Go' must be a 'Know-Go' for your client.