The primary part of an agent’s responsibility is to
The principal, but apart of it also goes to the 3rd party
Customer
The 3rd party or non-representative for whom service is provided
Real estate professional duties are
* reasonable car and skill in performance
* honest and fair
dealing
* disclosure of all facts that the real estate
professional knows or should reasonably be expected to know that
materially affect the value or desirability of the property
Real estate brokers and sales associates ___ always be careful about the statements they make
MUST
They need to be sure the consumer understands whether the statement is an
Opinion or fact
Statements of opinion
Are permissible if not made carelessly and there is no intention to deceive
Statements of facts
Must be accurate
Puffing
Exaggeration of a property’s benefits
Puffing is legal
Real estate professionals must enforce that none of their statements can be interpreted as fraudulent
Puffing is considered
Unethical if legal
Fraud
Is the intentional misrepresentation of a material fact in such a way as to harm or take advantage of anther person
What does fraud include
Making false statements about a property but also intentionally concealing or failing to disclose important facts when there is a duty to disclose
Negligent misrepresentation
Occurs when the real estate professional should have known that a statement about a material fact was false
A ___ due to the professional’s carelessness will make the professional culpable
Misrepresentation
What does culpable mean
Subject to liability
If a real estate professional accidentally fails to perform some act
They may be liable for damages that result from such a negligent ommission
Example of this
Forgetting to deliver a counteroffer
Disclosure of environmental hazards
Can render properties unusable for the buyer’s intended purpose
The buyer or buyer’s mortgage lender
Requests inspection or tests to determine the presence or level of risk
In residential transactions involving up to 4 units
The seller typically has a duty to disclose any known defects that threaten structural soundness or personal saftey
Later defect
Is a hidden structural defect that would not be discovered by ordinary inspection
Can a buyer cancel the sales contract or receive damages when a seller fails to reveal known defects
Yes, everything must be disclosed to the buyer
In some states, the agent has an
Independent duty to conduct a reasonably competent and diligent inspection of the property
If the real estate professional should have known about a substantial defect that is detected later by the buyer
The real estate professional may be liable to the new buyer for any damages resulting from that defect
Stigmatized properties
Are those that society has found undesirable because of events that occurred there or because of proximity of the property to a known nuisance
What is considered a common criminal event
Homicide, illegal drug manufacturing, gang-related activities, or a suicide
Properties that are stigmatized by rumors
Hunted
Some states have laws regarding the disclosure of information about such properties…
Designated to protect sellers, real estate professionals, and local property values against a baseless psychological reaction
Megan’s Law
Promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or commits sexually violent crimes
Megan’s Law
Creates another category of stigmatized property