medium · National Real Estate Exam
A buyer's agent is aware that the property being purchased has a 'cloud on title,' but the agent believes the issue is minor and will be resolved at closing. The agent does not tell the buyer.
If the title is later found to be unmarketable, what is the buyer's legal position?
- The knowledge is only imputed if the agent was a 'general agent' rather than a 'special agent.'
- The buyer is entitled to a full refund because title issues are 'strict liability' matters for the seller.
- The buyer is considered to have accepted the property with knowledge of the title defect because the agent's knowledge is imputed to the buyer.
- The agent's belief that the issue was 'minor' protects the buyer from the imputation of knowledge.
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