Humber/Ontario Real Estate Course 4 Exam Practice

If a salesperson is aware of a latent defect in a property, what is the best course of action when asked by a buyer client?

1. Advise the buyer about the defect.

2. Stay silent but recommend a property inspection.

3. Avoid mentioning the defect as it's a common issue.

4. Do not comment, since it's a specialized area.

5. Refer the buyer to another agent.

6. Supply only the known repair costs to the buyer.

The correct answer is: Advise the buyer about the defect.

When a salesperson is aware of a latent defect in a property, the best course of action is to advise the buyer about the defect. This choice reflects the ethical duty of the salesperson to disclose material facts that could influence the buyer's decision-making. Latent defects are flaws in a property that are not easily noticeable or may not be apparent upon inspection, but they can adversely affect the property's value or usability. By informing the buyer about the latent defect, the salesperson upholds the principle of transparency that is critical in real estate transactions. This approach not only protects the buyer's interests but also helps maintain trust and integrity in the professional relationship. Additionally, disclosing such information can mitigate potential legal repercussions for the salesperson or their brokerage, as failure to disclose known defects can lead to claims of misrepresentation or fraud. The choice to remain silent while recommending a property inspection does not fulfill the responsibility to disclose known defects, as it leaves the buyer unaware of critical issues that might not be uncovered in a general inspection. Similarly, avoiding mention of the defect because it's common, deferring comments due to the specialization of the issue, referring the buyer to another agent, or only providing repair costs fail to meet the ethical obligations and may expose the salesperson to liability. Thus,