Agency
A Texas license holder discovers their client has made fraudulent representations to the other party in a real estate transaction. The agent should:
ACover for the client since agent-client confidentiality is absolute
BAdvise the client to correct the misrepresentation and potentially withdraw from the representation if the client refuses✓ Correct
CInform TREC immediately without telling the client
DComplete the transaction and disclose afterward
Explanation
A license holder cannot facilitate fraud. If a client makes fraudulent misrepresentations, the agent must advise the client to correct them. If the client refuses, the agent may need to withdraw from the representation. Participating in or concealing fraud violates TREC rules, the DTPA, and possibly criminal law.
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