Agency
A Colorado listing broker discovers a material defect after the listing agreement is signed. Under the seller's agency, the broker's duty is to:
AImmediately terminate the listing agreement
BDisclose the defect to potential buyers as an adverse material fact✓ Correct
CKeep the information confidential per loyalty to the seller
DOnly disclose if the buyer specifically asks
Explanation
Colorado license law requires brokers to disclose adverse material facts about the property to all parties regardless of fiduciary relationships. Loyalty to the seller does not override the duty to disclose known material defects.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Seller's Agent (Listing Agent)A real estate licensee who represents the seller's interests, markets the property, and owes fiduciary duties to the seller.
State-Specific Concepts
License Law
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