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 must disclose any material facts about the property, including the recent zoning change, which could significantly impact its value. This requirement is essential to ensure that the owner makes an informed decision regarding the sale of the property.
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 while there are regulations regarding out-of-state agents, they do not prohibit the licensee from acting on behalf of the owner as long as the licensee is licensed in the state where the property is located. The key issue here is not the licensee's ability to act, but their obligation to disclose critical information about the property.
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 misinterprets the legal obligations of the licensee. While it is generally good practice for a licensee to keep the owner informed, there is no legal requirement that stipulates the owner must be informed of the selling price after the property is sold, particularly if the owner is no longer involved in the transaction.
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 option is correct as it highlights the ethical and legal duty of the licensee to disclose pertinent information that could influence the owner's decision. The zoning change is a material fact that directly affects the property's value, and failing to disclose it would be unethical and potentially illegal.
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 misleading because simply informing the owner of the intention to purchase is not sufficient. The licensee is also required to disclose the zoning change that affects the property's potential value. Without this disclosure, the legality of the transaction could be called into question.
Conclusion
The correct answer, C, emphasizes the necessity for the licensee to disclose significant information, like zoning changes, that affect the property’s value before proceeding with the purchase. All other options fail to recognize this critical obligation, either misrepresenting legal requirements or neglecting the importance of full disclosure in real estate transactions.