Washington real estate licensees are obligated by statute to “disclose all existing material facts known by the broker and not apparent or readily ascertainable to a party, though this statement does not imply any duty to investigate matters that the broker has not agreed to investigate.” In other words, being guilty by association does not cut the mustard if they don’t have actual knowledge of a material fact.
For example, one broker was accused of providing misinformation when a property they had listed stated the property size as 5 acres. The county profile stated the property was 5 acres, but the recorded survey proved the acreage size was somewhat less than that. The broker had not seen a copy of the survey and had no legal duty to investigate further. The seller’s copy of the survey was not provided to the broker at time of listing and the discrepancy was not discovered until it became a bone of contention later in the transaction.
In another example, (upon initially listing a property) the seller refused to disclose that it had previously been used as an illegal drug manufacturing site. They even threatened the broker with legal action if they ever disclosed that to any buyers. The broker was undeterred since they knew that the seller would never reveal that sordid detail in court and finally convinced the seller that they were obligated by law to disclose all known material facts to any serious buyer even if the seller chose not to do so.
The definition of material facts means “information that substantially adversely affects the value of the property or a party’s ability to perform its obligations in a real estate transaction or operates to impair or defeat the purpose of the transaction,” which means a buyer’s ability to perform (or lack of) is also relevant and a material fact. For example if the earnest money was deposited late or not at all, or if the check bounced, that material fact should be disclosed to the seller.
Some things that are NOT material facts are; suspicions that the property or neighboring property is or was the site of a murder, suicide, rape or sex crime, robbery, burglary or gang related activity. If it does not adversely affect the physical condition or title to the property it is not a material fact.