What is the consequence of failing to disclose material defects during a real estate transaction?

Failing to disclose material defects during a real estate transaction can lead to significant legal consequences, including potential lawsuits and penalties. In real estate, material defects are issues that could affect a buyer's decision or the property's value. Sellers and their agents have a legal and ethical obligation to disclose these defects to prospective buyers. If a buyer later discovers that a material defect was not disclosed, they may have grounds to sue the seller for misrepresentation or fraud. This could result in the buyer seeking damages, which may include the cost of repairs or even a complete refund of the purchase price. Additionally, regulatory authorities may impose penalties on licensees who fail to comply with disclosure requirements. Thus, maintaining transparency is critical in order to protect both parties and ensure a fair transaction.