26 April What is the difference between a latent defect and a material fact? Who must disclose what? April 26, 2017 By Cindy Sellers Disclosure 0 A seller is required to disclose the existence of known latent defects. Latent defects are defined as material defects in real property or an improvement to real property that: (a) a buyer would not reasonably be expected to ascertain or observe by a careful visual inspection of the property; and (b) would pose a direct threat to the health or safety of the buyer or an invitee or occupant of the buyer. A real estate licensee in Maryland is required to disclose material facts the licensee knew or should have known that relates to the property. A material fact is defined as anything that would affect 1) the value of the property or 2) a buyer/tenant’s decision to purchase/lease the property or how much to offer to purchase or lease the property. Section 17-322(b)(4) of the Maryland Real Estate Brokers Act provides that it is the obligation of a real estate licensee to ascertain and disclose all material facts to all parties of which the licensee has actual knowledge or those which the licensee should have known that relate to the property. Additionally, the Maryland Code of Ethics requires that licensees make a reasonable effort to ascertain all material facts concerning every property for which the licensee accepts the agency in order to fulfill the obligation to avoid error, exaggeration, misrepresentation, or concealment of material facts. A real estate licensee may be held accountable if he knew or should have known of a condition and failed to disclose it. With regard to material facts, they may be included as an attachment to the disclosure and disclaimer statement. We highly recommend that you disclose any material facts in writing. Finally, under the law, the material fact disclosure must be provided to buyers prior to the time a buyer submits an offer. When you disclose, you put the buyer on notice to make a further investigation. You also minimize your own liability and that of your seller. Related Posts What must I disclose if the first contact between a buyer’s agent and an unrepresented seller/lessor is not a face-to-face? What must I disclose if the first contact between a buyer’s agent and an unrepresented seller/lessor is not a face-to-face? What must I disclose if the first contact between a seller’s agent or subagent and an unrepresented buyer/lessee is not face-to-face? What must I disclose if the first contact between a seller’s agent or subagent and an unrepresented buyer/lessee is not face-to-face? Q: What must I disclose if the first contact between a buyer’s agent and an unrepresented seller/lessor is not a face-to-face? Agency Q: What must I disclose if the first contact between a seller’s agent or subagent and an unrepresented buyer/lessee is not face-to-face? Agency What is the difference between one party terminating the agreement and both parties executing a contractual release agreement? What is the difference between one party terminating the agreement and both parties executing a contractual release agreement? I would like to prepare a BPO for a bank. What do I need to know? Is it legal for a Maryland real estate licensee to prepare a Broker Price Opinion for a fee? If so, must I include the Competitive Market Analysis disclosure? May a salesperson or associate broker receive payment for a BPO directly from the person requesting it? Comments are closed.