Interesting question received by the legal hotline…. “I listed a house that had a material defect. The seller did not want to disclose that fact to potential buyers and fired me. They have now relisted the property with another agent and the listing does not disclose the defect – what are my obligations?”
A: Chapter 93A states that it is an unfair or deceptive act if a person acting in trade or commerce “fails to disclose to a potential buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.” Failure to disclosure any material defect of which you, as the Realtor®, are aware, exposes you to liability. You are only obligated to carry out the lawful instructions of your seller client. In this scenario, any instruction to hide a material defect would be unlawful and you would not be bound by any duty of obedience.
But what happens with that knowledge after you are no longer involved in the sale? Your disclosure obligations under Chapter 93A do not extend beyond the period of representation. There is no obligation for you to pass along any knowledge you may have to a subsequent agent; however, you do not have a duty to keep that information confidential. The continued duty of confidentiality survives termination of the agency relationship, but does not apply to legally required disclosures, such as known physical hazardous conditions of property.