It's not the brokerage that has to disclose this--it's the seller. The seller has an obligation to disclose all facts known to the seller but which are discernable by simply viewing the property which are material or significant. The broker simply lists those facts the seller provides to them and tells them to list. A lawsuit regarding the boundaries would certainly be material or significant and would not be readily or casually apparent on viewing the property; thus, the seller had a duty to disclose this and the failure to disclose is fraud. Fraud provides a basis to vacate, or undo, the transaction and cover the deposit. If the seller will not voluntarily release it, the buyer could sue the seller for a court order for the release and for additional compensation flowing out of the fraud--such as the cost of the legal proceeding.