Texas Real Estate Sales Agent ExamProperty DisclosuresMedium
A seller's property is located near an old industrial site. While the seller has no direct knowledge of contamination on their specific property, the buyer's agent discovers public records indicating potential soil contamination in the general vicinity. What is the buyer's agent's primary responsibility?
- ATo contact the seller's agent and demand the seller conduct environmental testing.
- BTo disclose the potential environmental hazard to the buyer and recommend further investigation.
- CTo keep this information confidential to avoid jeopardizing the sale.
- DTo advise the buyer that the seller has no knowledge, so there's no issue.
Show answer & explanationAnswer & explanation
Correct answer: B. To disclose the potential environmental hazard to the buyer and recommend further investigation.
A buyer's agent has a fiduciary duty to disclose all known material facts to their client. Potential environmental hazards, even if not directly on the property but in the vicinity and known through public records, are material facts that could influence the buyer's decision. The agent should disclose this and recommend expert investigation.
Why the other options are wrong
- A. An agent cannot compel a seller to perform tests; their duty is to their own client (the buyer).
- C. Withholding known material facts from a client is a breach of the agent's fiduciary duty.
- D. The seller's lack of knowledge does not negate the material nature of information known by the agent.
Agent's Duty to Disclose Environmental Hazards (Buyer's Agent)
A buyer's agent must disclose all known material facts, including potential environmental hazards in the vicinity, and advise the buyer to seek expert investigation.
- Agent's fiduciary duty to client (buyer).
- Disclose all known material facts.
- Even if seller is unaware, agent must disclose what they know.
- Recommend expert inspections/testing for hazards.
Memory trick: Known fact, client's protection, expert's direction.