Agency
In New York, an agent who discovers a material defect in a property after the listing agreement is signed must:
AKeep it quiet to protect the seller's interests
BDisclose it to prospective buyers as required by their duty to disclose material facts✓ Correct
COnly disclose it if the seller gives permission
DWait until closing to disclose
Explanation
Regardless of when a material defect is discovered, an agent has an ongoing duty to disclose material facts to prospective buyers. Concealing known defects can expose both the agent and seller to liability for fraud or misrepresentation.
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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.
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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
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