Final answer:
Option 1: Broker A and Seller B acted unethically.
Step-by-step explanation:
The correct answer is Option 1: Broker A and Seller B acted unethically.
In this scenario, Broker A lied about the condition of the property to Buyer C, while Seller B knew about the lie but said nothing. Both Broker A and Seller B are engaged in unethical behavior.
Real estate transactions require honesty and transparency. Lying about the condition of the property is a violation of professional ethics and can lead to legal consequences. It is important for brokers and sellers to act ethically and provide accurate information to buyers.