What is the consequence for a real estate agent who fails to disclose material defects?

When a real estate agent fails to disclose material defects, the agent can face potential legal liability. Material defects are significant issues that could affect a buyer’s decision to purchase a property, such as structural problems, pest infestations, or issues with the title.

Disclosing such defects is part of the agent's fiduciary duty to their clients and is also mandated by law in many jurisdictions, including Oregon. If an agent neglects this responsibility and the buyer suffers damages as a result—whether through financial loss, legal disputes, or other consequences—the agent may be held liable for failing to provide necessary information that would have influenced the buyer's decision. The potential for lawsuits or claims of negligence can lead to financial repercussions for the agent, such as compensatory damages or even punitive damages in severe cases.

Being held legally accountable for nondisclosure serves as a strong incentive for agents to conduct thorough due diligence and maintain transparency throughout transactions. This principle emphasizes the importance of ethical conduct within the profession and protects the interests of all parties involved in real estate transactions.