Humber/Ontario Real Estate Course 3 Exam Practice

If a structural issue from unauthorized renovations is identified but not disclosed by a Seller, what should a salesperson's course of action be?

1. Ignore the issue as it has not caused problems for the seller

2. Reveal the defect because it is a significant hidden defect

3. Describe the notched beams as a visible defect

4. Advise the buyer to thoroughly inspect the property

5. Notify the previous contractor about the issue

6. Inform the local building inspector

The correct answer is: Reveal the defect because it is a significant hidden defect

Revealing the defect is essential because it is classified as a significant hidden defect that could impact the property's value and safety. In real estate transactions, the duty of care mandates that salespersons disclose material facts about a property. When unauthorized renovations lead to structural issues, these problems usually qualify as significant hidden defects since they are not readily visible and can affect the functionality and safety of the home. By disclosing this information, the salesperson helps protect the interests of the buyer, ensuring they are fully informed before making a purchase decision. This course of action aligns with the principles of transparency in real estate and helps maintain professional integrity in the transaction process. Moreover, disclosing significant defects also mitigates potential liability for the salesperson should issues arise after the sale, as they complied with their duty to disclose known defects. While other options might seem practical, they do not align with the ethical obligations and legal responsibilities that a salesperson has in relation to their clients and the property they are selling. Ignoring the issue or mischaracterizing it could lead to complications and undermine trust in the profession.