When must a real estate broker disclose the existence of a material defect in a property?

A real estate broker is required to disclose the existence of a material defect in a property as soon as they become aware of it. This obligation is based on the principle of transparency and the duty to protect the interests of potential buyers. Material defects are issues that could significantly affect the value or desirability of the property, and failure to disclose them can lead to legal complications or claims of misrepresentation.

Disclosing material defects early in the listing or sales process helps ensure that buyers have all the necessary information to make an informed decision. It also helps to build trust between the broker and the clients. While some might think that disclosure only needs to happen during the closing process or in response to inquiries from buyers, such an approach may not align with the ethical standards and legal requirements that govern real estate practices in Indiana. A proactive disclosure at the moment the broker becomes aware of the defect is crucial for maintaining compliance and fostering a fair transaction environment.