Under TRESA and RECO regulations, what must a real estate registrant do when they discover a potential title defect during a transaction?
Correct Answer
C) Immediately disclose the defect to their client and recommend legal advice
TRESA requires registrants to act in their clients' best interests and provide competent service, which includes immediately disclosing any discovered title defects and recommending that clients obtain appropriate legal advice to address the issue properly.
Why This Is the Correct Answer
Option C correctly reflects TRESA's requirement that registrants act in their clients' best interests by providing competent service and full disclosure. Under TRESA sections dealing with client service standards, registrants must immediately inform clients of any material facts affecting the transaction, including title defects. Since title issues require legal expertise beyond a registrant's scope of practice, recommending legal advice ensures the client receives appropriate professional guidance while fulfilling the registrant's disclosure obligations.
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