What action has Broker Smith committed by selling a lot without disclosing the blanket mortgage?

Broker Smith has committed a fraudulent act by selling a lot without disclosing the blanket mortgage. In real estate transactions, transparency is crucial, especially regarding encumbrances like mortgages that could affect the buyer's ownership or financial obligations. The blanket mortgage represents a loan that encumbers multiple properties, and failing to disclose this information can mislead the buyer about their financial responsibilities and the status of the property.

By not informing the buyer of the blanket mortgage, Broker Smith has deprived them of crucial information that could influence their decision to purchase, which undermines the trust essential in real estate transactions. This lack of disclosure is not just an oversight; it is a significant breach of ethical obligations and legal expectations. Such actions can be deemed fraudulent because they involve intentionally misrepresenting or concealing important facts that could impact the transaction's fairness and legality.

In this context, the implications of non-disclosure are significant, as they can lead to financial loss for the buyer and legal consequences for Broker Smith, including potential penalties or loss of license.