What is a broker's duty under common law regarding material adverse information?

Under common law, a broker has a duty to disclose material adverse information that they know about a property. This duty is generally tied to the concept of honesty and transparency in real estate transactions, which is essential for maintaining trust in the marketplace. When a broker is aware of a defect or any material adverse condition that could affect a buyer's decision, they are required to disclose this information, particularly if it is obvious or readily apparent.

The requirement to disclose known defects is crucial because it ensures that all parties can make informed decisions. This transparency protects the interests of the buyer and upholds the integrity of the transaction. If the broker is aware of a significant issue and fails to disclose it, they could be held legally responsible for any resulting damages.

In contrast, the other choices do not align with the broker's duty under common law. Disclosing only to the seller would not fulfill the broker's obligation to inform all parties involved. Merely investigating all information without disclosing known defects would not satisfy the duty of transparency. Keeping all information confidential contradicts the obligation to disclose material facts that could impact the transaction. Thus, the responsibility to disclose known issues, especially when they are apparent, underscores the broker's ethical and legal duty in real estate transactions.