Humber/Ontario Real Estate Course 1 Exam Practice

What must a landlord do if he receives a city notice regarding defective wiring in his property, which is now listed for sale?

1. Disclose the wiring issue only to buyer clients, not customers

2. Move forward without addressing the issue as it's not material

3. No need to disclose since it's apparent to anyone inspecting the property

4. Disclose the defect to potential buyers as it's a material latent defect

The correct answer is: Disclose the defect to potential buyers as it's a material latent defect

Disclosing the defect to potential buyers as it's a material latent defect is essential in this situation because latent defects are issues that are not readily visible or apparent to someone inspecting the property. In this case, defective wiring is a significant concern that can affect both the safety and value of the property. Landlords and real estate agents have a legal and ethical obligation to disclose material defects that could impact a buyer's decision. Being transparent about such defects fosters trust and ensures that buyers are fully informed before making a purchase decision. The disclosure also protects the landlord from potential legal ramifications that could arise from failing to inform buyers about significant issues with the property. Moreover, when the property is on the market, addressing known defects can facilitate a smoother transaction and demonstrate that the landlord is responsible and conscientious about property management. In contrast, the other options fail to recognize the importance of transparency regarding material issues. They suggest inadequate disclosure practices that could ultimately lead to complications or disputes during the sale process.