What could be a consequence of a broker not disclosing title defects to a buyer?

The correct choice highlights the significant legal and ethical implications of a broker failing to disclose title defects to a buyer. If a broker knowingly withholds information about defects, both the broker and the seller could potentially be guilty of fraud. Fraud occurs when there is a willful misrepresentation or concealment of a material fact that induces the buyer to enter into a transaction. In this scenario, the title defects are a material fact that a buyer needs to know in order to make an informed decision about the purchase.

When a buyer relies on the broker’s representations and later discovers undisclosed title defects, the buyer may suffer financial losses or legal troubles as a result, which could lead to a lawsuit against both the broker and the seller. This underscores the broker's ethical obligation to act in the buyer's best interests by providing all relevant information about the property, including any defects. Failing to do so can lead to serious legal consequences, including liability for damages in fraud claims. Therefore, this option correctly captures the potential repercussions faced by both parties due to negligence or deceit.