Humber/Ontario Real Estate Course 1 Exam Practice

If a sales representative forgets to disclose a latent defect during a house sale, what ethical issue could arise?

1. Negligence

2. Fraud

3. Non-disclosure

4. Misrepresentation

5. Failure to act in good faith

6. Violation of fiduciary duty

The correct answer is: Misrepresentation

If a sales representative forgets to disclose a latent defect during a house sale, the ethical issue that could arise is misrepresentation. Misrepresentation occurs when false information is provided or important information is omitted, leading to a misunderstanding or deception on the part of the other party. In this scenario, by failing to disclose the latent defect, the sales representative is misrepresenting the property and misleading the buyer. The other options are not the most appropriate ethical issues in this context: - Negligence typically involves the failure to exercise reasonable care or competence in performing duties, which does not directly address the deliberate act of not disclosing the defect. - Fraud involves intentional deception or misrepresentation, but it is generally more deliberate and calculated than simply forgetting to disclose an issue. - Non-disclosure is essentially what occurred in the situation described, but it doesn't convey the ethical violation as clearly as misrepresentation. - Failure to act in good faith is a broader concept that encompasses various ethical violations, but misrepresentation is more specific to the act of not disclosing the defect. - Violation of fiduciary duty pertains to breaching the trust and loyalty owed to the client, which can encompass various actions beyond the specific act of misrepresenting the property.