What happens when a licensee fails to disclose a known defect in a property?

When a licensee fails to disclose a known defect in a property, they could face a lawsuit because they have a legal obligation to disclose material facts that could affect a buyer's decision. This duty of disclosure is rooted in the principle of fair dealing and honesty within real estate transactions. If a seller or an agent does not disclose a significant issue—such as major structural damage, pest infestations, or environmental hazards—they may be held liable for any damages that result from the buyer's reliance on the misleading information. A buyer who discovers a defect after the sale might pursue legal action against the seller or the agent for misrepresentation or fraud, seeking remedies like damages or rescission of the contract. This outcome reflects the importance of transparency and the legal responsibilities real estate professionals hold to protect consumers.