Which scenario illustrates a violation of the fiduciary duty of disclosure?

The scenario that illustrates a violation of the fiduciary duty of disclosure is when a licensee fails to disclose known foundation issues. The fiduciary duty of disclosure requires real estate professionals to provide their clients with all relevant information that could affect a transaction. This includes disclosing any material defects in a property, such as structural issues like foundation problems.

When a licensee is aware of such significant concerns but chooses not to inform their client, they are not fulfilling their obligation to act in the best interest of the client. The failure to disclose this type of critical information can lead to serious consequences for the client, potentially resulting in financial loss or safety issues. Thus, the act of withholding such important details constitutes a breach of the fiduciary duty to disclose.