A listing agent learns that the home was once used as a marijuana grow operation and has since been fully remediated. The seller's lawyer confirms the seller has no legal obligation to disclose this, and the seller does not want it disclosed. What should the listing agent do?
Correct Answer
C) Advise the seller, and disclose only with the seller's written consent
Where the seller has no legal obligation to disclose, O. Reg. 567/05 s. 22.2 does not require the listing agent to tell buyers, and Code of Ethics s. 12 bars disclosing the client's confidential information without written consent. The agent should advise the seller on how the history may affect buyers, lenders and insurers, disclose it only if the seller consents in writing, and never deny it, because Code s. 5 prohibits misrepresentation.
Why This Is the Correct Answer
This answer is correct because it combines the duty to advise the client with the confidentiality rule. With no legal obligation on the seller, s. 22.2 is not triggered, and Code of Ethics s. 12 allows disclosure only with the seller's written consent. The agent advises the seller of the consequences and discloses if the seller agrees in writing, while never misrepresenting the property's history.
Why the Other Options Are Wrong
Deep Analysis of This Agency & Professional Ethics Question
Background Knowledge for Agency & Professional Ethics
Memory Technique
Exam Tip for Agency & Professional Ethics
Real World Application in Agency & Professional Ethics
Common Mistakes to Avoid on Agency & Professional Ethics Questions
Key Terms
More Agency & Professional Ethics Questions
A listing agent learns that the basement had water damage years ago that was fully repaired. The seller has no legal obligation to disclose it and refuses to mention it in the listing. What is the agent's best course of action?
Under the RECA Rules, a brokerage practising common law agency lists a seller's home, and one of its buyer clients wants to buy that home. How must the brokerage proceed?
Which of the following scenarios represents a conflict of interest that must be disclosed?
A buyer's agent learns that the seller is motivated to sell quickly due to financial difficulties. What should the agent do with this information?
An agent learns that a major development project will be announced near their client's property, likely increasing its value significantly. The client wants to list immediately at current market value. What is the agent's ethical obligation?
- → Which of the following best describes the duty of confidentiality owed by a real estate agent?
- → What information must an agent disclose to a buyer client about a property's condition?
- → A real estate agent discovers that a property they are showing has a known foundation issue that the seller has not disclosed. What should the agent do?
- → In a complex commercial transaction, a real estate professional discovers information that creates competing duties between their fiduciary obligation to their client and their duty to disclose material facts to other parties. How should this conflict be resolved?
- → An agent representing a buyer learns confidential information about the seller's motivation to sell quickly due to financial hardship. How should this information be handled?
- → A buyer's agent learns that their client has been pre-approved for a mortgage up to $500,000, but the client instructs them to only look at properties under $400,000. What should the agent do with this information?
- → An Ontario salesperson represents a seller who receives two identical offers, one of them from the salesperson's spouse. The seller does not know about the relationship. What does the Code of Ethics require if the salesperson is to keep acting for the seller?
- → What is 'designated agency' in the context of Alberta real estate?
- → A buyer tells their Ontario salesperson that the seller is facing foreclosure and must sell quickly. How should the salesperson handle this information?
- → A self-represented buyer asks the Ontario seller's salesperson whether the asking price is a good deal. What should the salesperson do?
People Also Study
Real Property Law
60 questions
Contracts & Agreements
60 questions
Mortgage & Real Estate Finance
60 questions
Land Use & Planning
50 questions
Related Study Resources
Helpful Resources
Previous Question
A real estate agent discovers that a property they are showing has a known foundation issue that the seller has not disclosed. What should the agent do?
Next Question
An Alberta listing agent learns that the seller client's home has a hidden foundation defect that buyers are unlikely to spot on a viewing. What is the agent's primary obligation?