Title: The Importance of Disclosing Pertinent Facts
As REALTORS® navigate the challenging world of real estate, many factors come into play when dealing with real estate transactions. From the ever-changing market to handling clients with all kinds of needs, it is important to keep in mind what issues you could face that could jeopardize your clients.
One of the most cited Articles of the Code is Article 2, the Disclosure Article. I have administered many hearings and complaints that have cited Article 2 are steadily increasing. Reasons as to why certain pertinent information about a property or transaction has been withheld range from, “My client told me not to mention it and I do what my client tells me.” to, “If it’s not on the Seller’s Disclosure, it’s not my responsibility to tell them, it’s the Sellers”.
Article 2 states that REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
To those who question the importance of disclosure, here are a few reasons why you should:
- Ensures informed decision-making - buyers rely on accurate information when buying and selling property such as property value, current condition, past incidents and environmental hazards.
- Builds trust- full and honest disclosure creates trust with your client and your fellow professionals while assuring their decisions are based on facts, not assumptions.
- Reduces legal and financial risk – failure to disclose pertinent information can lead to breach of contract, lawsuits and penalties.
- Financial Protection - protects the seller from disputes and costly litigation
- Maintains Professional Standards – REALTORS® have a duty to avoid concealing pertinent facts, even if the seller does not mention it, and not doing so could result in an ethics complaint being filed.
To quote our Preamble: The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal!