2.1 Vermont Mandatory Consumer Disclosure

What the Mandatory Consumer Disclosure Is

The Mandatory Consumer Disclosure (MCD) is a written notice the Vermont Real Estate Commission requires every licensee to hand to a consumer early in the relationship. It is governed by the Administrative Rules of the Vermont Real Estate Commission and exists so consumers understand a single critical idea: talking to an agent does not, by itself, make you a client.

The MCD explains the difference between a client (someone the firm represents, owed loyalty and confidentiality) and a customer (someone the firm does not represent but still treats honestly). It also explains the firm's agency model so the consumer knows whether their information will be protected.

Exam trap: The MCD is an informational disclosure, not an agreement. Signing it does NOT create agency, list a property, or obligate the consumer. Test items that say "signing the MCD makes the consumer a client" are false.

Two Versions, One Office Policy

Vermont publishes the MCD in two flavors, and the firm's pre-chosen office policy dictates which one a licensee uses:

A licensee cannot mix and match per deal. The brokerage decides its model in advance, and the matching MCD travels with every consumer contact.

Timing: "First Reasonable Opportunity"

The Rule's timing standard is at the first reasonable opportunity and, critically, before any confidential information is disclosed. Confidential information includes a buyer's maximum price, motivation, financing limits, or a seller's bottom line.

Worked example

A buyer phones agent Dana and immediately says, "I'll go up to $420,000 but list at $390,000." Dana should have delivered (or referenced) the MCD before that statement. Because the buyer volunteered confidential price information to a non-client, Dana must treat it carefully and still cannot use it against the buyer if Dana later represents the seller. The lesson: deliver early to avoid muddying the relationship.

What the Consumer Learns From the MCD

The form spells out the minimum duties every licensee owes to a customer (a non-represented party), separate from the heightened fiduciary duties reserved for clients. These customer-level duties apply to everyone the licensee deals with:

Key distinction: The duty to disclose runs to the property's material condition. A licensee for the seller does NOT owe a buyer-customer disclosure of the seller's confidential negotiating position — that is protected client information.

What Counts as a Material Fact

Vermont's disclosure duty centers on material facts — facts that would reasonably affect a buyer's decision or the property's value. Licensees must disclose those known to them; they are not required to investigate hidden conditions, but they cannot conceal what they know.

• Physical condition: failing septic, roof leaks, foundation movement, known water intrusion
• Environmental: lead-based paint (pre-1978), radon, prior flooding in a flood zone, underground tanks
• Title/legal: recorded easements, boundary disputes, zoning violations, open permits

Procedure for handling a defect you learn about

1. Confirm the fact (e.g., seller mentions a chronic wet basement).
2. Advise the seller-client of the duty to disclose; document the advice.
3. Ensure the fact reaches buyers/customers — a licensee may not stay silent to help a client hide a known defect.
4. Keep written records of disclosure for the transaction file.

Documentation and Recordkeeping

Because the Commission can audit files, the licensee should note in the transaction record when and how the MCD was delivered (in person, email, or e-signature) and retain a copy. A common discipline case is not the quality of the disclosure but the absence of proof it was timely delivered.

Common trap: Candidates assume the MCD is only for buyers, or only for written offers. It is for every consumer — buyer or seller — at first reasonable opportunity, regardless of whether a deal ever forms.