90. An owner who lives out of state contacts a licensee who is in the state where the owner's property is located. The owner hires the licensee to sell the property for $150,000. The licensee realizes that the land is in an area that has recently been rezoned for a higher use. The licensee decides to buy the property, and informs the owner. After purchasing the property and, 3 weeks later, the licensee sells the same property for $175,000. Which of the following statements about this situation is correct?
Answer: C
The licensee can legally purchase the property only after informing the owner of the zoning change and how it will affect the property.
In this scenario, the licensee is required to disclose material information, such as the rezoning of the property, which could significantly affect its value and marketability. Without informing the owner of this pertinent detail, the licensee's actions would be considered unethical and potentially illegal.
A) The licensee cannot legally act as an agent for an owner who lives out of state without either an active real estate license from that state or the help of a cooperating out-of-state licensee.
This statement is incorrect because the question does not specify whether the licensee has the appropriate license to act in the state, and it does not address the legality of the licensee's disclosure obligations regarding the zoning change. The focus of the question is on the licensee’s actions after engaging the owner, not the licensing requirements.
B) Since the property sold at a profit within 6 months after purchase, the licensee must inform the owner of the selling price.
This statement is misleading. While transparency is important, there is no legal requirement for the licensee to disclose the selling price simply because the property was sold at a profit after 6 months. The critical issue is whether the licensee informed the owner about the zoning change prior to the purchase.
C) The licensee can legally purchase the property only after informing the owner of the zoning change and how it will affect the property.
This statement is correct as it emphasizes the ethical duty of the licensee to disclose material facts about the property that can impact its value. By failing to provide this information, the licensee would compromise their integrity and legal standing in the transaction.
D) As long as the licensee has informed the owner of the intention to purchase the property the licensee's actions are proper and legal.
This statement is incorrect because simply informing the owner of the intention to purchase is not sufficient. The licensee is also required to disclose any material changes, such as the zoning change, which could influence the owner's decision-making process.
Conclusion
The correct answer is option C, as it highlights the necessity for the licensee to disclose significant information about the property's zoning status prior to the purchase. All other options either misinterpret the legal obligations of the licensee or fail to address the critical need for transparency regarding material facts that could affect the property’s value.