Course: A buyer's agent in Maryland is showing a property with a known latent defect that the seller has not disclosed. What is the agent's duty? (EN)
A course dedicated to exploring the concepts related to: A buyer's agent in Maryland is showing a property with a known latent defect that the seller has not disclosed. What is the agent's duty?.
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Chapter: A buyer's agent in Maryland is showing a property with a known latent defect that the seller has not disclosed. What is the agent's duty? (EN)
Introduction: Latent Defects, Disclosure Obligations, and Fiduciary Duty in Maryland Real Estate Transactions
Chapter Overview: This chapter addresses the complex ethical and legal ramifications arising from a specific scenario within Maryland real estate transactions: the discovery of a known latent defect in a property by a buyer's agent when the seller has failed to disclose said defect. This analysis hinges on the intersection of real estate law, agency law, and principles of fiduciary duty, with a focus on the specific responsibilities incumbent upon the buyer's agent.
Scientific Importance: The scientific significance of this topic lies in its application of ethical and legal frameworks to a practical problem solvable through a systemic, well-defined framework. It necessitates an examination of information asymmetry within the real estate market. Latent defects, by their very nature, represent a critical instance of information asymmetry, where the seller possesses knowledge that the buyer does not, thus potentially leading to adverse selection and compromised market efficiency. Understanding the buyer's agent's role is crucial in mitigating this imbalance and ensuring a more transparent and equitable transaction. Further, the analysis employs a decision-theoretic approach, where the agent must weigh potential actions (e.g., disclosure vs. non-disclosure) against the potential consequences for all stakeholders (buyer, seller, brokerage, themselves). This necessitates the application of ethical decision-making models, such as utilitarianism or deontology, to justify a particular course of action. The chapter considers the interplay of legal precedent and ethical guidelines as applied through the lens of game theory, given the potentially adversarial relationships between the involved parties.
Educational Goals: Upon completion of this chapter, learners will be able to:
Identify and Define Latent Defects: Accurately define what constitutes a latent defect under Maryland law, distinguishing it from patent defects and cosmetic issues. This includes understanding the requirements for materiality and the impact on property value or safety.
Analyze Disclosure Requirements: Comprehend the legal requirements for seller disclosure in Maryland, including the legal implications of non-disclosure and fraudulent concealment. Students will also distinguish between what needs to be disclosed and what is subject to discovery through reasonable diligence.
Articulate the Buyer's Agent's Fiduciary Duty: Clearly articulate the specific fiduciary duties owed by a buyer's agent to their client, focusing on the duties of loyalty, obedience, confidentiality, and disclosure. This includes understanding how these duties apply in the context of a known latent defect.
Evaluate Ethical and Legal Obligations: Critically evaluate the ethical and legal obligations of a buyer's agent when faced with the discovery of a known latent defect, applying relevant case law, regulations, and professional codes of conduct.
Formulate a Compliant Course of Action: Develop a defensible and legally compliant course of action that a buyer's agent should take when confronted with the scenario described, outlining the specific steps required to protect the client's interests while adhering to all applicable legal and ethical standards. This includes proper documentation and communication strategies.
