What is the broker guilty of for staying silent about known foundation issues?

Houtan HormozianExpert on Real Estate, Finance and PropTech

Real Estate Agents What Happens If You Stay Silent About Known Defects? Must-Know Ethics Question

23 Jul 2025 · 1 min

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In this short YouTube clip, the presenter poses an ethics quiz: a broker knows a home has foundation problems but the seller asks the broker to stay silent. The audience must choose the broker’s liability from four options. The correct answer is D – fraudulent nondisclosure. The presenter explains that, regardless of the seller’s request, brokers have a legal duty to disclose material defects that affect a property’s value or safety. Concealing such defects constitutes fraud and can result in lawsuits, loss of real‑estate license, and monetary penalties. The video ends with a call to like, tag a friend, and contact the creator via the website or direct message.

Questions this video answers

Fraudulent nondisclosure

Chapters

Question of the day: A broker knows that the home has a history of foundation issues, but the seller tells them not to say anything. The broker follows the seller's request and stays silent. What's the broker guilty of? A. Obedience to the seller. B. Puffing. C. Misrepresentation. D. Fraudulent nondisclosure. The answer is letter D, fraudulent nondisclosure. Even if the seller says, don't say anything, the broker has a legal duty to disclose material facts that affect the property's value or safety. Hiding known defects is considered fraud, and it can lead to lawsuits, loss of license, and penalties. Found this helpful? Please like our post and tag a friend. Contact us through our website or message us right here.