Humber/Ontario Real Estate Course 4 Exam Practice

Under REBBA, how should a salesperson handle the disclosure of known property defects?

1. Disclose only if the price is significantly impacted.

2. Always disclose true and verifiable defects to potential buyers.

3. Keep discretion and disclose only to clients.

4. Disregard if the defect is thought to be minor or reparable.

5. Only disclose upon direct inquiry from a prospective buyer.

6. Leave disclosure decisions to a superior or management.

The correct answer is: Always disclose true and verifiable defects to potential buyers.

The correct approach under the Real Estate and Business Brokers Act (REBBA) is to always disclose true and verifiable defects to potential buyers. This obligation is rooted in the principles of transparency and fairness in real estate transactions. Full disclosure helps buyers make informed decisions, fostering trust between parties involved in the transaction. By mandating disclosure of known defects, REBBA aims to prevent any misrepresentation or fraud that could arise from withholding critical information. It recognizes that even minor defects could influence a buyer’s decision, and sellers (or their representatives) are required to act in good faith to ensure that buyers are informed. Other options suggest limited disclosure based on varying factors, such as price impact or the perceived severity of the defect, which can undermine the ethical standards expected in real estate transactions. Keeping discretion in disclosure could lead to potential disagreements in the future, while leaving disclosure decisions to superiors might hinder the responsiveness needed in client interactions. Therefore, maintaining a policy of comprehensive disclosure aligns with the legal and ethical expectations set forth by REBBA, protecting both the interests of buyers and the integrity of the real estate profession.