Oregon 30-Hour Real Estate Law Practice Test

What must Jim disclose when representing Joel in the sale of the property?

1. That Joel intends to subdivide the property

2. That Rolly is his business partner

3. That he has previously sold properties

4. That he represents the buyer, Rolly

The correct answer is: That Rolly is his business partner

In this scenario, the correct disclosure relates to Jim's relationship with Rolly, who is his business partner. When representing a client in a real estate transaction, it is crucial to disclose any potential conflicts of interest or relationships that could affect the transaction's integrity or the client’s decision-making process. By informing Joel that Rolly is his business partner, Jim provides transparency, allowing Joel to make informed decisions knowing that there may be a personal business interest involved. Failing to disclose this relationship might mislead Joel regarding Jim's loyalties and motivations, which is essential for maintaining trust and transparency in a professional capacity. This ties into the ethical obligations that real estate professionals have to their clients, which include full disclosure of material facts relevant to the transaction.