What Is Material fact?
Information that a reasonable investor would consider important in deciding whether to buy, sell, or hold a security. Omitting or misrepresenting material facts violates state securities law, and the Series 63 requires understanding how to identify what constitutes material information.
Material fact across 5 exams
Material fact appears on the following exams. Each defines it in the context candidates are tested on:
- Series 63
- Information that a reasonable investor would consider important in deciding whether to buy, sell, or hold a security. Omitting or misrepresenting material facts violates state securities law, and the Series 63 requires understanding how to identify what constitutes material information.
- CA Broker
- Any information about a property or transaction that would reasonably influence a buyer's or seller's decision. Brokers must disclose material facts known to them, including defects, environmental hazards, and previous offers.
- IL Broker
- Any information that could influence a buyer's or seller's decision to enter into a real estate transaction. Examples include property defects, pending litigation, zoning violations, environmental hazards, and structural problems. Brokers must disclose all known material facts to clients.
- FL Broker
- Information that significantly affects the value, desirability, or use of a property. Brokers and agents have a duty to disclose all known material facts to relevant parties, including defects, liens, or other conditions affecting the property.
- NC Broker
- Any fact that could influence a reasonable party's decision in a transaction; NC brokers must disclose known material facts about a property to all parties, even non-clients.