DRE & LicensingIntermediateCalifornia Exam

What is 'negligent misrepresentation' in the context of real estate?

AIntentionally lying about a property's condition, per standard DRE licensing procedure

BMaking a false statement of fact without knowing it is false but without exercising reasonable care to determine the truthCorrect

CRefusing to disclose known defects, as required for license renewal in California

DMisrepresenting the commission rate to a client, consistent with Business and Professions Code licensing rules

Why Making a false statement of fact without knowing it is false but without exercising reasonable care to determine the truth Is Correct

Answer B: Making a false statement of fact without knowing it is false but without exercising reasonable care to determine the truth

Negligent misrepresentation occurs when a person makes a false statement of fact while believing it to be true but without using reasonable care to verify its accuracy. Unlike fraud (intentional), negligence doesn't require intent to deceive, but the agent can still face civil liability and license discipline.