In real estate practice, when are licensees expected to disclose known material defects?

In real estate practice, when are licensees expected to disclose known material defects?

• A. When known, typically as part of seller disclosures and required by law.
• B. Only when asked by the buyer's lawyer.
• C. Never; information is confidential between seller and agent.
• D. Only for commercial properties.

Answer: (A)

The main idea is that licensees have a duty to reveal known material defects to protect buyers and maintain trust in the transaction. When a defect is known and could affect a buyer’s decision or the property's value, it should be disclosed. This is usually done through the seller’s disclosure statement and is often required by law or regulation, so disclosure is expected as part of the process, not something to be provided only if asked. The obligation applies to all types of property, not just commercial, and information isn’t kept confidential between seller and agent—it’s information that buyers are entitled to know to make an informed decision.

The main idea is that licensees have a duty to reveal known material defects to protect buyers and maintain trust in the transaction. When a defect is known and could affect a buyer’s decision or the property's value, it should be disclosed. This is usually done through the seller’s disclosure statement and is often required by law or regulation, so disclosure is expected as part of the process, not something to be provided only if asked. The obligation applies to all types of property, not just commercial, and information isn’t kept confidential between seller and agent—it’s information that buyers are entitled to know to make an informed decision.