A real estate agent discovers that a property they are listing has a leaky basement that the seller has not disclosed. What should the agent do?
Correct Answer
A) Inform the seller they must disclose this material defect
Agents have a duty to advise their clients about disclosure obligations regarding material defects. While they must act in the seller's best interests, they cannot assist in concealing material facts that could affect the transaction.
Why This Is the Correct Answer
Option A correctly reflects the agent's duty under Canadian real estate law. TRESA and provincial regulations require agents to advise clients about disclosure obligations for material defects. The agent maintains their fiduciary duty by informing the seller of their legal requirement to disclose, rather than taking independent action. This approach protects both the seller from potential legal liability and ensures compliance with disclosure requirements while preserving the agency relationship.
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