A buyer's agent discovers their client is planning to purchase a property to convert it to illegal rooming houses. What is the agent's ethical obligation?

Option A: Continue with the purchase as the client's plans are confidential

Option A is incorrect because while client confidentiality is important, it doesn't override the agent's obligation to avoid facilitating illegal activities. Continuing representation knowing the illegal intent would violate professional ethics and potentially expose the agent to legal liability. Confidentiality protects client information but doesn't require agents to assist in illegal activities.

Option B: Report the client's plans to municipal authorities immediately

Option B is incorrect because it violates client confidentiality without proper justification. While agents cannot assist illegal activities, they're not required to report client plans to authorities unless specifically mandated by law (such as money laundering under FINTRAC). The appropriate response is withdrawal, not reporting, which maintains confidentiality while avoiding complicity.

Option D: Negotiate a lower price due to the intended illegal use

Option D is incorrect because it suggests continuing with the transaction while using the illegal intent as a negotiation tool. This approach still facilitates the illegal activity and potentially makes the agent complicit. Additionally, using knowledge of illegal plans for negotiation advantage would be unethical and could constitute a breach of fiduciary duty.