If that material information is contrary (i.e. A broker must consider how that material information affects each of the parties in the transaction, not just the individual party they are representing. Next, brokers should consider whether that material information is adverse to a party’s interest in the transaction. Examples of material facts include facts affecting title, facts affecting the physical condition of the property and environmental hazards affecting the property. Factual information is material when a reasonable person would have ascribed actual significance to the information. In order to answer these types of questions, brokers first should consider whether the information is material. Brokers may have difficulty in ascertaining whether to disclose such facts. For example, a broker may become aware that the roof of the property was recently repaired, or that the property was hit by lightning several times, or that one of the owners of the home for sale is a smoker. Brokers should refrain from advising clients about clients’ disclosure duties, which may be different.ĭuring the course of a real estate transaction, a broker for either side of the transaction may become aware of certain information pertaining to the property. While clients have certain disclosure obligations, they are not addressed in this Position Statement. In all real estate transactions, brokers are obligated to disclose known adverse material facts to all of the parties involved in the transaction. Review the position statement for more information.ĬP-46 Commission Position on Broker Disclosure of Adverse Material Factsīrokers must disclose known adverse material facts. The statement clarifies what is a material fact, the definition of a "known" material fact, and what situations may psychologically impact or stigmatize property that should not be disclosed. The following position statement has been approved by the CREC and is in effect.
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