Question

Janie is a sales agent representing a seller under a listing agreement. Sally knows that the house has plumbing problems but fails to disclose such problems to potential buyers. Which of the following is a TRUE statement regarding Janie's culpability if the buyer sues her for negligence?

A) A buyer must show that Janie has a duty to disclose the information to him.
B) The fact that Judy represents the seller is a defense to negligence.
C) Janie is not liable for negligence because her fiduciary duties are to the seller.
D) A buyer need not prove that Janie owed a duty to him.

Answer 1

The agent has a duty to disclose known defects, and a failure to do so can result in a negligence claim. The correct answer is that the buyer must show Janie had a duty to disclose to him.

Step-by-step explanation:

The issue here involves the real estate agent's responsibility towards disclosure in a real estate transaction. According to real estate law, the agent has a duty to disclose any known material defects of the property to potential buyers. The correct answer is A) A buyer must show that Janie has a duty to disclose the information to him. As an agent representing the seller, Janie indeed has a fiduciary duty to the seller; however, this duty does not negate her obligation to be honest and forthright with potential buyers, particularly regarding known problems with the property. Failure to disclose known defects can result in a negligence claim against Janie. Therefore, options B, C, and D would not constitute a defense to negligence in this case.