A Seller’s Property Disclosure form states that there are no known material defects with the property, but the listing licensee is aware of asbestos…

Under New Jersey law, a real estate licensee has an affirmative duty to disclose all known material defects of a property to prospective buyers. Asbestos is considered a material defect due to its health risks. The licensee's direct knowledge of the asbestos creates an independent obligation to disclose, which overrides the seller's incorrect information on the property disclosure form. This duty of honesty and fair dealing with all parties is paramount and is not negated by the seller's instructions or the suggestion of a home inspection. Failure to disclose a known material defect is a serious violation of license law.

B. A licensee's duty to disclose known material defects to a buyer supersedes the duty of loyalty to the seller; a licensee cannot legally conceal such facts at the seller's request.

C. Suggesting a home inspection does not relieve the licensee of the legal responsibility to disclose material defects they personally know exist. This would be considered concealment.

D. While suggesting remediation is helpful, it does not replace the legal requirement to disclose the presence of the material defect (asbestos) in the first place.

1. New Jersey Administrative Code (N.J.A.C.) Title 11, Chapter 5, Section 6.4(b): "Every licensee shall make reasonable effort to ascertain all material information concerning the physical condition of every property for which he or she is retained to market... A licensee shall not be a party to any concealment of information or any misrepresentation regarding the physical condition of a property." This regulation establishes the licensee's duty to investigate and prohibits them from participating in concealment.

2. New Jersey Real Estate Commission, Real Estate License Law and Rules, N.J.S.A. 45:15-17(l): This statute provides grounds for license suspension or revocation for "making any false promises or any substantial misrepresentation." Omitting a known material fact like asbestos is considered a substantial misrepresentation.

3. Weintraub v. Krobatsch, 64 N.J. 445 (1974): This landmark New Jersey Supreme Court case established that a real estate broker has a duty to disclose to a potential buyer any known, latent (not readily observable) defects in a property. This duty exists independently of what the seller discloses.