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