Adverse Material Facts Scenario In this scenario, the broker and the seller entered into an exclusive right-to-sell listing agreement. The buyer, who became the complainant, and the seller executed a contract to buy and sell real estate for the property. The buyer presented an inspection objection notice stating, Sewer scope found that roots have penetrated the clay pipe at the joints and there is major blockage. Request that the mainline be hydro-flushed and re-scoped by licensed sewer cleaning company. Per inspector recommendation, do not use cutting blades because there are offsets in a few of the joints and the blades will damage the pipe. An inspection resolution was signed by the buyer and the seller stating that the seller, at seller's expense, shall have the mainline hydro-flushed and re-scoped by a licensed sewer cleaning company. The plumbing company provided the seller with an invoice describing the work they performed under a section entitled Drain Cleaning. Under a section entitled Recommendations, the technician wrote, Still recommend two-way outside clean-out to jet line, but insist entire line should be replaced to street depth of 15 feet with an estimate of $16,000. The listing broker asked the seller to replace the invoice and delete the $16,000 recommendation to replace the line, so that the buyer would not get nervous and back out of the deal. The seller obtained a new invoice with the deletion, which was provided to the buyer. The buyer subsequently learned that the listing broker had instructed the seller to have the plumbing company remove thousands of dollars of recommended repairs from the invoice that was provided to the buyer. The buyer stated, shortly after closing on the property, that the basement flooded and required repairs. The buyer then called the plumbing company, previously hired by the seller, to complete those sewer repairs. In the complaint, the buyer alleged that the listing broker withheld material information about plumbing work that was recommended to be done on the property he was purchasing. The buyer subsequently sued the seller for damages. On the next page, we'll answer some questions regarding this scenario.

exclusive right-to-sell listing agreement

sewer issues

inspection resolution

recommended repair

lawsuit