A real estate agent discovers that a property they are listing has a history of flooding that the seller has not disclosed. What should the agent do?
Correct Answer
D) Advise the seller to disclose, and withdraw if they won't
While agents owe loyalty to their clients, they cannot assist in fraudulent misrepresentation. The agent must advise the seller to disclose material facts and may need to withdraw from the representation if the seller refuses to comply with disclosure obligations.
Why This Is the Correct Answer
Option D correctly balances the agent's fiduciary duty to the seller with professional and legal obligations. Under TRESA and provincial regulations, agents cannot assist in misrepresentation or fraud. The agent must advise the seller of their disclosure obligations regarding material defects like flooding history. If the seller refuses to disclose, the agent must withdraw to avoid participating in fraudulent concealment. This approach protects both the agent's license and maintains market integrity.
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A listing brokerage represents the seller, and a competing offer arrives from a buyer who is also a client of the same brokerage. Neither client has a designated representation agreement. What disclosure and consent requirements must be met?
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