Humber/Ontario Real Estate Course 4 Exam Practice

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What should be done if property use for illegal activities is discovered in a sale agreement?

  1. Include a clause that the property was not used for such activities during seller's ownership.

  2. Include a clause requiring initials from all parties about any illegal use.

  3. The agreement can state that repairs related to illegal activity are not guaranteed by the seller.

  4. Present a full repair history document about illegal use.

  5. Mandatory initialization by the buyer only.

  6. Buyer must assume risks with no specific clause.

The correct answer is: The agreement can state that repairs related to illegal activity are not guaranteed by the seller.

In a situation where property use for illegal activities is discovered in a sale agreement, it is crucial to include a clause in the agreement that states that repairs related to illegal activity are not guaranteed by the seller. This is the correct course of action as it helps to protect the seller from potential liabilities and legal issues arising from the previous illegal use of the property. By including this clause, the seller is making it clear that any repairs or consequences related to the illegal activities are the responsibility of the buyer after the sale is finalized. The other options are not appropriate in this scenario: A. Including a clause that the property was not used for such activities during the seller's ownership may not be sufficient protection for the seller, especially if there is documented proof of illegal activities on the property. B. Requiring initials from all parties about any illegal use may not be practical or legally binding in addressing the issue of property use for illegal activities. D. Providing a full repair history document about illegal use may not be feasible or applicable in this situation, as the seller may not have extensive documentation on such activities. E. Requiring only the buyer to initial may seem one-sided and might not adequately address the issue at hand. F. Requiring the buyer to assume risks

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