Agency
A Virginia seller has instructed their listing agent to disclose a structural defect to all buyers. The agent fails to do so with one buyer. The broker may be liable for:
ANothing — it was the seller's disclosure obligation
BThe agent's failure to follow the seller's lawful instructions✓ Correct
CRESPA violations
DOnly a VREB complaint
Explanation
A principal broker is responsible for their affiliated agents' actions. Failure to follow a seller's lawful disclosure instructions is a breach of the duty of obedience, for which both the agent and broker may be liable.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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