A listing agent learns that the basement floods in heavy rain, a hidden defect that the seller is legally obliged to disclose to buyers. The seller has not disclosed it and asks the agent to keep quiet. What is the agent's obligation under Ontario law?
Correct Answer
D) Disclose it to every interested buyer despite the seller's wishes
Under O. Reg. 567/05 s. 22.2, if a seller has a legal obligation to disclose a fact to the buyer and the seller's broker or salesperson knows it, the salesperson must disclose it to every buyer who expresses an interest in the property and make best efforts to get a written acknowledgement. The seller's instructions cannot override this duty. The rule covers facts the seller is legally obliged to disclose; it is not a general duty to tell buyers every material fact.
Why This Is the Correct Answer
This answer is correct because s. 22.2 of O. Reg. 567/05 makes disclosure mandatory once two conditions are met: the seller has a legal obligation to disclose the fact, and the seller's salesperson knows it. Both are met here, so the agent must tell every buyer who expresses an interest, whatever the seller wants, and should make best efforts to get a written acknowledgement from each buyer.
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