PSI Oklahoma Real Estate Practice Test

The agent's failure to disclose a visible property defect could lead to which type of legal exposure?

1. Negligent infliction

2. Negligent misrepresentation

3. Fraudulent misinterpretation

4. Simple negligence

The correct answer is: Negligent misrepresentation

The correct choice reflects the legal consequences that can arise from an agent’s failure to disclose a visible property defect. When an agent does not disclose a known defect in the property that is evident and observable, this can be classified as negligent misrepresentation. Negligent misrepresentation occurs when a party provides false information or fails to provide necessary information, leading another party to rely on that misinformation to their detriment. In the context of real estate, if an agent knows about a visible defect but fails to disclose it, they may be misleading potential buyers regarding the condition of the property. This act of omission can fulfill the criteria of misrepresenting the property’s condition, as the buyer may have assumed the property was in good condition based on the agent's failure to disclose this information. In contrast, the other options relate to different legal concepts that would not be as applicable in this scenario. Negligent infliction pertains to causing harm acting carelessly without intent to mislead, fraudulent misinterpretation involves intentional deceit, and simple negligence refers to a standard of care that has not been met without the component of misrepresentation. Thus, the nuances of negligent misrepresentation are particularly relevant when discussing disclosure failures in real estate transactions.