California Real Estate Broker ExaminationReal Estate PracticeEasy
A real estate agent lists a property that has an easement running through the backyard for public utilities. The agent is aware of this easement but fails to mention it to a prospective buyer who expresses interest in building a large shed in that specific area. This omission, if discovered after the sale, would most likely constitute a violation of the agent's duty of:
- ALoyalty.
- BDisclosure.
- CConfidentiality.
- DAccounting.
Show answer & explanationAnswer & explanation
Correct answer: B. Disclosure.
Agents have a duty to disclose all known material facts affecting the value or desirability of a property to prospective buyers. An easement that restricts property use is a material fact.
Why the other options are wrong
- A. Loyalty pertains to acting in the client's best interest, not typically to informing third parties of property defects.
- C. Confidentiality relates to protecting client's private information, which is unrelated to property easements.
- D. Accounting involves proper handling of client funds, which is not applicable to disclosing property features.
Duty of Disclosure (Material Facts)
Real estate agents have a legal and ethical obligation to disclose all known material facts about a property that could affect its value or desirability to a prospective buyer.
- Applies to both seller's and buyer's agents.
- Material facts include physical defects, encumbrances (like easements), and environmental hazards.
- Failure to disclose can lead to legal liability and license revocation.
Memory trick: OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care.