An Alberta associate acting as a transaction broker discovers that the property has a material latent defect that neither party is aware of. What is the associate's obligation under RECA rules?
Correct Answer
B) The associate must disclose the material latent defect to both parties
Under RECA Rules s. 59(4)(e)(i), a brokerage acting under a transaction brokerage agreement must disclose to the buyer all material latent defects it knows of. Section 59(4)(a) also requires it to treat both parties even-handedly, and any information given to one party is disclosed to the other, so both the buyer and the seller learn of the defect.
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