A license holder representing a seller discovers during the listing period that the property has a significant foundation defect. The seller instructs the license holder not to mention it to buyers. Under TREC's Canons of Professional Ethics, how should the license holder proceed?
Correct Answer
B) Disclose the foundation defect to prospective buyers, because the Canons require license holders to reveal known material facts affecting the property
Under TREC Rules §531.2 (Canons of Professional Ethics), a license holder must disclose to prospective buyers all known material facts that could affect a buyer's decision, regardless of the client's instructions to the contrary. A significant foundation defect is a material fact, and the duty to disclose it to buyers overrides the seller's directive to remain silent.
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