29. A licensee has a listing. The licensee suspects that there is no city water to the home because it is in a rural area, but she relies on the seller's statement and says nothing concerning the water system to a buyer. The buyer discovers that the home has no city water service after the purchase. In this case, the licensee
Answer: C
The licensee may be liable for misrepresentation since she should have known about the lack of city water services.
In this scenario, the licensee is potentially liable for misrepresentation because she failed to investigate the water system despite having reasonable suspicion about its absence. Relying solely on the seller's statement without further verification constitutes negligence in her duty to the buyer.
A) may file a complaint against the seller with the state's attorney general
This option is incorrect because while the licensee may have the right to file a complaint, it does not directly address her responsibility to the buyer regarding misrepresentation. Filing a complaint does not absolve her of liability in this situation.
B) may file suit against the seller for not disclosing the lack of city water services
This option is also incorrect. While the licensee might consider legal action against the seller for non-disclosure, it does not pertain to her own liability to the buyer. The focus here is on the licensee's responsibility to provide accurate information.
C) may be liable for misrepresentation since she should have known about the lack of city water services
This option is correct. The licensee had a duty to investigate the water system due to her suspicions about the property's rural setting. Her failure to disclose relevant information to the buyer can be deemed a misrepresentation, making her liable.
D) is not liable for misrepresentation since the seller did not disclose the lack of city water services
This option is incorrect as it incorrectly absolves the licensee of responsibility. Even if the seller failed to disclose the information, the licensee had a professional obligation to ensure that the buyer was informed, especially given her suspicions.
Conclusion
The licensee's failure to investigate and disclose the absence of city water services represents a breach of her duty to the buyer, making her liable for misrepresentation. While the seller's non-disclosure is relevant, it does not mitigate the licensee's responsibility in this context. Therefore, the correct answer is C, as it accurately reflects the licensee's obligations and potential liabilities.