Humber/Ontario Real Estate Course 3 Exam Practice

When a buyer wants to know about potential material latent defects in a property, what should the salesperson disclose?

1. All visible property defects

2. Only defects that have caused problems

3. Any hidden significant defects unknown to the buyer

4. None of the defects to respect client interests

5. Defects discovered in the past renovations

6. Issues only with substantial costs

The correct answer is: Any hidden significant defects unknown to the buyer

The focus in real estate transactions, particularly regarding latent defects, lies in the obligation of salespersons to provide truthful and complete information to buyers. In this context, latent defects refer to significant issues that are not immediately visible or obvious and could affect the property's value or safety. Disclosing any hidden significant defects unknown to the buyer ensures that they are fully informed about the property's condition. This transparency is essential because it allows the buyer to make an educated decision before completing a purchase. It aligns with the principle of full disclosure, which is a critical expectation in real estate transactions aimed at protecting both buyer and seller interests. While visible property defects are important, they do not encompass the full responsibility of the salesperson, as readers noted; those are not "latent." Similarly, only focusing on defects that have caused problems or those discovered during renovations would overlook the broader obligation to inform the buyer of any significant issues that may not yet have manifested in observable problems. Ultimately, it's crucial for the salesperson to prioritize the buyer's awareness of potential significant defects that remain hidden, as this can have major implications for the buyer’s satisfaction and financial investment in the property.