What may occur if a seller refuses to disclose known material defects in a property?

If a seller refuses to disclose known material defects in a property, they may face legal liability for misrepresentation. This stems from the legal principle that requires sellers to be honest about the condition of their property. Material defects are significant issues that could affect the value or desirability of the property, such as structural damage or water leaks. Failing to disclose these defects can lead to claims of misrepresentation or fraud, as the buyer could argue they were misled about the property's condition.

In legal terms, misrepresentation occurs when a seller provides false information or withholds important facts that would influence a buyer’s decision. In situations where defects are discovered after the sale that the seller knew about but did not disclose, the seller can be held accountable, which could result in financial consequences, including being required to compensate the buyer for damages.

The other options do not accurately describe the consequences of failing to disclose defects. While there are regulatory penalties for various forms of misconduct, simply not disclosing information does not automatically lead to losing a license or facing a fine from the state. Moreover, the buyer retains the right to pursue legal action in cases of non-disclosure and misrepresentation.