Agency
A Florida real estate licensee represents a buyer in a transaction. The licensee discovers that the seller failed to disclose known water intrusion damage that was patched and painted over. The licensee should:
AKeep the information confidential to avoid complicating the transaction
BDisclose the known defect to the buyer immediately✓ Correct
CReport the seller to FREC for non-disclosure
DWithdraw from the transaction without disclosing the reason
Explanation
Under Florida law and the licensee's duty of full disclosure (and under Johnson v. Davis as codified in F.S. 689.261), known material defects must be disclosed to the buyer. The licensee representing the buyer has a duty to disclose this information immediately, regardless of any instruction from the seller. Concealing known defects constitutes fraud.
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