A BC listing licensee learns of a material latent defect (hidden foundation damage) in the client's property, and the seller instructs the licensee not to disclose it to buyers. Under the Real Estate Services Rules, what must the licensee do?
Correct Answer
C) Refuse to provide further trading services to that client
Real Estate Services Rules s. 59(2) requires a seller's licensee to disclose every known material latent defect to all other parties before an agreement is made. Under s. 59(3), if the client instructs the licensee to withhold that disclosure, the licensee must refuse to provide further trading services to that client for the trade.
Why This Is the Correct Answer
This answer is correct. Rules s. 59(3) states that if a client instructs a licensee to withhold a disclosure required under s. 59(2), the licensee must refuse to provide further trading services to or on behalf of that client in respect of the trade. Continuing to act while the known latent defect is concealed would breach s. 59(2).
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