Tess, the broker for the seller, learns her client knows there are undisclosed defects on the property. What are the legal ramifications?

When Tess learns that her client, the seller, is aware of undisclosed defects on the property, both she and the seller bear potential legal liability. In real estate transactions, agents have a fiduciary duty to act in the best interests of their clients, but they are also obligated to disclose material facts that could affect the buyer’s decision. If the seller knows of defects and fails to disclose them, it could lead to claims of misrepresentation or fraud.

Simultaneously, because Tess is aware of this information and does not disclose it, she can also be held liable for not fulfilling her responsibilities as a broker. This dual liability arises because both the seller's non-disclosure and Tess's failure to ensure that necessary information is communicated to potential buyers represent violations of both ethical duties and legal obligations concerning transparency in real estate transactions. Therefore, in this case, both the seller and Tess could face legal repercussions for the undisclosed defects, establishing their shared responsibility in the matter.