Illinois Leasing Agent Practice Exam

In transactions involving the public, what can a licensee do regarding material facts if the client is the property owner?

1. Must disclose all material facts

2. May remain silent about material facts

3. Must provide a written summary of all facts

4. Must disclose any negative facts only

The correct answer is: May remain silent about material facts

In scenarios where a licensee represents a property owner, the correct approach regarding material facts is to understand that the licensee is bound by certain ethical and legal obligations. The situation generally allows the licensee to maintain a certain level of confidentiality concerning the property owner’s interests. Specifically, if the client is the property owner, they may have instructed the licensee to keep specific information or material facts private, which is a component of the fiduciary duty that a licensee must uphold. In real estate practice, material facts are defined as information that could influence the decision of a reasonable person in a transaction. When acting on behalf of the owner, the licensee typically does not have to volunteer material facts unless it is required by law based on the context of the sale or lease. Instead, they may choose to refrain from disclosing certain material facts unless directly asked. This silence does not, however, absolve the licensee from responsibility for any misrepresentation or fraud if they actively conceal material facts that are legally obligated to be disclosed. Understanding this balance is crucial for anyone working in real estate leasing.