Making False PromisesExample: An owner tells a listing

Misrepresentation and Omission Scenarios - NC Real Estate Practice 8th Edition 2014-2015 Flashcards

• Negligent Misrepresentationa. Willful Misrepresentation, b. Willful Omission, c.

Negligent Misrepresentation d. Negligent Omission e.

Making False PromisesExample: An owner tells a listing

agent with ABCRealty that his house has 1850 heated square feet. Without verifying the square footage, the agent records 1850 square feet on the listing form and in the listing information published in the local MLS. The house is subsequently sold by a sales agent with XYZ Realty who tells the buyer that according to theMLS data, the house has 1850 square feet. The buyer later discovers that the house actually has only 1250 square feet. The selling agent would be guilty of...

• Willful Misrepresentiona. Willful Misrepresentation, b. Negligent

Misrepresentation, c. Willful Omission, d. Negligent

Omission?Example: An agent knows that the heat pump at

alisted house does not function properly, but tells aprospective buyer that all mechanical systems andappliances are in good condition.Material Facts about the Property itself a structural defect or defective mechanical systems Definition of Willful MisrepresentationThis occurs when a licensee who has "actual knowledge" of a material fact DELIBERATELY MISINFORMS a buyer, seller, tenant or landlord concerning fact. Also applies when licensee does "not have actual knowledge" of a matter and provides INCORRECT information.

• Willful Misrepresentationa. Willful Omission, b. Negligent Omission, c. Willful

Misrepresentation, d. Negligent

Misrepresentation.Example: Without checking with the

owner, an agenttells a prospective buyer of a listed house that heatingand cooling costs are "very reasonable." He may be guilty if heating and cooling costs are in fact extraordinarily high.

• Negligent Omissiona. Negligent Omission,b. Nonec. Willful

Misrepresentation,d. Negligent Misrepresentation. e. Willful

OmissionExample:A listing agent lists for sale a house

located adjacent to a street that is about to be widened into a major thoroughfare. The thoroughfare project has been very controversial and highly publicized. The city recently finalized its decision to proceed with the project and the plans for the street widening are recorded in the city planner's office. A buyer, working with a selling agent,

makes an offer to buy the house. The listing agent does not disclose the street widening plans to the buyer or selling agent and claims later that he/she was not aware of the plans. Both listing agents are guilty of...Material Facts relating directly to the ability of the agent'sprincipal to complete the transaction a pending foreclosure sale

• Nonea. Willful Misrepresentation, b. Negligent

Misrepresentation, c. Willful Omission, d. None e. Negligent

OmissionExample: An agent representing a buyer on an

in-house sale becomes aware that the seller with whom his buyer is negotiating is under pressureto sell quickly and may accept much less than the listing price. Believing such

information should always be kept confidential, the buyer's agent does not provide the buyer with this information. The buyer's agent is guilty of...

• Negligent Misrepresentationa. Negligent Misrepresentation, b. Willful

Misrepresentation, c. Willful Omission, d. Negligent

Omission.Example: An agent has previously sold several

lots ina subdivision under development and all those lotspassed a soil suitability test for an on-site septic

system.The agent then sells Lot 35 without checking as to whether this lot satisfies the soil test; however, the agent informs the buyer that Lot 35 will supportan on-site septic system when in fact the contrary istrue.Definition of Willful OmissionThis occurs when a licensee has "ACTUAL KNOWLEDGE" of a material fact and a duty to disclose such fact to a buyer, seller, tenant, or landlord, but DELIBERATELY fails to disclose such fact.