AgencyIntermediateAlaska Exam

An Alaska real estate agent mistakenly tells a buyer that the property has no history of flooding when it does. The agent faces liability for:

AIntentional misrepresentation only
BNegligent misrepresentation, as the agent had a duty to know material factsCorrect
CNo liability because the buyer should have conducted their own investigation
DOnly moral liability, not legal liability

Why Negligent misrepresentation, as the agent had a duty to know material facts Is Correct

Answer B: Negligent misrepresentation, as the agent had a duty to know material facts

An agent who makes false statements without knowing them to be false but without reasonable care to verify them may be liable for negligent misrepresentation. Agents have a duty to know material facts about properties they list or show.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

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