Seller’s Instruction to Keep Foundation Repairs Quiet
Kansas listing agent Luis knows the sellers paid $18,000 for foundation repairs two years ago. The engineer’s report says the movement is “mitigated but not guaranteed” and recommends monitoring. The sellers instruct Luis in writing: “Do not mention the repairs; buyers never ask, and we need a clean sale.” Luis markets the house as “solid and move-in ready.” A buyer, Priya, tours with her own agent and asks Luis directly, “Has there ever been any water intrusion or foundation work?” Priya has a pending inspection contingency and is paying cash. Luis’s broker is out of town. Luis wants to keep the listing and avoid losing the commission.
1. Can Luis answer “no” or avoid the question? Analyze his duties under Kansas law and general agency principles.
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No. A Kansas licensee must be honest and must disclose known adverse material facts about the property. The foundation repairs, the engineer’s “not guaranteed” conclusion, and the monitoring recommendation are material because they affect value and the buyer’s decision. The sellers’ written instruction does not override the licensee’s duty. Answering “no” would be a false statement, and avoiding the question after a direct inquiry would be misleading. Marketing the home as “solid and move-in ready” while knowing of continuing foundation risk compounds the problem.
2. What should Luis do immediately, and what if the sellers order him to stay silent?
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Luis should tell the sellers in writing that he must disclose the known material defect, then disclose the repairs and the engineer’s report to Priya or her agent. He should document the disclosure and the sellers’ instruction. If the sellers insist on silence, Luis should notify his broker and may need to terminate the listing rather than participate in concealment. He should not wait for the inspection to find the issue, and he should not accept the commission as a reason to stay quiet.
3. Does Priya’s cash purchase or inspection contingency change the duty?
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No. Paying cash does not make a foundation defect immaterial, and an inspection contingency does not shift the licensee’s disclosure duty to the buyer. Priya’s inspector might find the problem, but Luis cannot rely on that possibility to conceal information he already knows. The duty is independent of financing and inspection terms.