To whom must Material Facts be disclosed?

Material facts must be disclosed to all parties involved in a real estate transaction, including third parties. This broad disclosure requirement is essential to ensure transparency and maintain trust between all parties. By revealing material facts, such as issues related to the property’s condition, neighborhood factors, or legal encumbrances, real estate professionals help buyers and sellers make informed decisions. This practice not only protects the interests of the clients but also helps ensure compliance with legal obligations and ethical standards within the real estate industry.

The rationale behind this comprehensive approach to disclosure lies in the nature of material facts, which are defined as information that significantly affects the value or desirability of the property. When all parties, including third parties, are aware of these facts, it promotes fairness and accountability throughout the transaction process.

In contrast, limiting disclosure to either the buyer or the seller fails to uphold the ethical standards expected in real estate practices, undermining the integrity of the transaction and potentially leading to legal implications for non-disclosure. Similarly, informing only the Real Estate Commission does not serve the immediate interests of the parties involved and does not fulfill the broader requirement for transparency in dealings. Therefore, disclosure to all relevant parties is essential in fostering an honest and equitable real estate market.