Agency
Under Texas law, a license holder who discovers during a transaction that property they are selling is involved in an undisclosed lawsuit should:
AComplete the transaction and disclose after closing
BDisclose the pending litigation to all parties as a material fact affecting title and value✓ Correct
COnly disclose if the lawsuit affects the purchase price
DWait for the seller's attorney to make the disclosure
Explanation
Pending litigation (such as boundary disputes, title claims, or condemnation proceedings) is a material fact that must be disclosed to all parties. A license holder who learns of undisclosed litigation has an obligation to ensure proper disclosure is made. Concealing material facts can result in TREC disciplinary action and civil liability.
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