Humber/Ontario Real Estate Course 4 Exam Practice

When must a known latent defect be disclosed?

1. Always disclose to avoid post-sale legal issues.

2. Only if it is not obvious upon viewing.

3. Never, to protect the seller’s best interests.

4. Only when it significantly impacts the property's value.

5. When legally required to do so from local authorities.

6. Only to the seller client, not the buyer.

The correct answer is: Only if it is not obvious upon viewing.

The correct understanding regarding known latent defects is based on the principle that these defects must be disclosed when they are not readily observable to the buyer. A latent defect is one that is not visible or obvious and can significantly affect the property’s value or safety. The rationale behind disclosing such defects is to ensure that potential buyers are fully informed, allowing them to make educated decisions regarding the property. Disclosing a known latent defect, even if it may not be immediately apparent, helps in maintaining ethical standards in real estate transactions. It also helps in protecting the seller from potential legal repercussions that could arise from failing to disclose important information that would affect the buyer's purchasing decision. The other options suggest scenarios where disclosure may not be necessary, such as only in specific conditions or not at all, which can lead to trust issues and legal complications down the line. Therefore, the obligation to disclose known latent defects is critical for facilitating transparency and integrity in the real estate process.