Florida Real Estate Broker ExaminationReal Estate Law and RegulationsEasy
A licensed real estate broker in Florida is preparing an offer for a buyer client. The broker is aware of a significant defect in the property's plumbing system which was disclosed by the seller's agent during a previous showing. The seller has not included this defect in the property disclosure statement. What is the broker's ethical and legal obligation regarding this defect?
- AThe broker should remain silent about the defect to avoid interfering with the seller's disclosure responsibilities.
- BThe broker must advise the buyer to conduct an independent inspection, but is not obligated to disclose the defect directly.
- CThe broker should only disclose the defect if the buyer specifically asks about the plumbing system.
- DThe broker must disclose the defect to the buyer, as it is a material fact that affects the value of the property.
Show answer & explanationAnswer & explanation
Correct answer: D. The broker must disclose the defect to the buyer, as it is a material fact that affects the value of the property.
Florida law requires real estate licensees to disclose all known material facts that affect the value of residential property and are not readily observable to a buyer. A significant plumbing defect is a material fact.
Why the other options are wrong
- A. Remaining silent about a known material defect is a breach of the broker's fiduciary duty to the buyer and a violation of disclosure laws.
- B. While advising an inspection is good practice, it does not absolve the broker of the direct disclosure obligation for known material facts.
- C. Disclosure of material facts is not contingent upon the buyer's direct inquiry; it is an affirmative duty.
Material Fact Disclosure
Real estate licensees must disclose all known material facts that significantly affect the value of a property and are not readily observable to the buyer.
- Applies to residential properties.
- Must be known by the licensee.
- Fact must be material (affect value).
- Fact must not be readily observable.
Memory trick: Known Material Facts Must Be Unveiled.