Humber/Ontario Real Estate Course 1 Exam Practice

If Buchanan knows about an unseen defect in a property, he should:

1. Tell the buyer about the defect

2. Stay silent and recommend an inspection

3. Say nothing as he isn’t an expert

4. Inform the buyer of common knowledge issues

5. Encourage a structural engineer evaluation

6. Provide a disclaimer about the defect

The correct answer is: Tell the buyer about the defect

The correct choice is to inform the buyer about the defect. In real estate transactions, agents have a fiduciary duty to their clients and must act honestly and transparently. If Buchanan is aware of an unseen defect in the property, revealing this information is crucial to ensure the buyer can make an informed decision. Not disclosing known defects can lead to legal repercussions for the agent and jeopardize the buyer's trust. Staying silent and merely recommending an inspection might seem prudent, but it does not fulfill the obligation of full disclosure. While suggesting a structural engineer evaluation could provide valuable insight, the primary responsibility lies in disclosing any known defects directly to the buyer rather than deferring the issue or pushing for expert evaluations without first sharing critical information. Additionally, a disclaimer about the defect typically wouldn’t relieve the agent of their duty to disclose material facts. Simply stating something is common knowledge doesn’t absolve the responsibility, especially if the defect is not apparent and may significantly impact the buyer's interest or safety. In short, communicating any known defects is key to maintaining ethical standards in real estate practice.