Humber/Ontario Real Estate Course 4 Exam Practice

If a seller misrepresents information about urea formaldehyde foam insulation, what can happen post-closing?

1. Caveat emptor principle applies, and the buyer is responsible.

2. No action can be taken as UFFI is not banned.

3. Seller may face legal action for damages due to the false warranty.

4. Seller is not liable as the issue was discovered after closing.

The correct answer is: Seller may face legal action for damages due to the false warranty.

The correct answer reflects that if a seller misrepresents information about urea formaldehyde foam insulation (UFFI), the seller may face legal action for damages due to the false warranty. This is rooted in the obligation of sellers to provide accurate and truthful information regarding property features and conditions. Misrepresentation can lead to a breach of contract or negligence claims, allowing the buyer to seek damages as a result of the seller's false statements. UFFI has been a contentious issue due to health concerns, and sellers have a duty to disclose relevant information that may affect a buyer's decision. If misrepresentation occurs, the buyer is entitled to legal recourse, which can include claiming damages for the impact of the misleading information. This context underscores the importance of transparency and honesty in real estate transactions, emphasizing that sellers are held accountable for the information they provide, which extends beyond mere possession of the disputed material. The potential for legal action helps protect buyers by holding sellers responsible for inaccurate disclosures that could lead to negative consequences after the transaction has been completed.