Georgia Laws and Rules Exam 2025 – 400 Free Practice Questions to Pass the Exam

In real estate transactions, brokers have a legal obligation to disclose material defects in a property. Material defects are issues that significantly affect the value or desirability of the property and could influence a buyer's decision. For example, if a property has a leaky roof or problems with the foundation, these are substantive flaws that should be disclosed to potential buyers, as they directly impact the safety and integrity of the home.

Disclosing undisclosed material defects is crucial because failure to do so can lead to legal ramifications for the broker and the seller, including potential lawsuits for misrepresentation. This responsibility to disclose is grounded in principles of transparency and fairness in real estate practices, aligning with consumer protection laws in Georgia and many other jurisdictions.

In contrast, while changes in market conditions, the reputation of a neighborhood, and personal beliefs regarding the sale may be important factors for buyers, they do not constitute material defects. They may influence a buyer's perception or decision, but they are not legally required to be disclosed like the material defects are.