Humber/Ontario Real Estate Course 2 Exam Practice

If a home seller knows their lower family room fireplace doesn't meet code and could be a fire hazard, but doesn't inform the buyer, and a fire occurs after closing:

1. The buyer has no legal recourse as it's a buyer beware situation.

2. The seller does not need to disclose a material latent defect if the buyer is using a home inspector.

3. A fireplace defect would not be seen as a material latent defect, thus no obligation to disclose exists.

4. Concealing a material latent defect can result in buyer litigation against the seller.

The correct answer is: Concealing a material latent defect can result in buyer litigation against the seller.

If a home seller knows about a material latent defect, such as a fireplace that doesn't meet code and could be a fire hazard, and fails to disclose this information to the buyer, it can lead to serious consequences. In real estate transactions, sellers have a legal obligation to disclose any material latent defects that may affect the value or safety of the property. By concealing such defects, the seller is in violation of this obligation and is subject to legal recourse from the buyer, which could result in litigation against the seller. Option A is incorrect because in Ontario, the principle of "buyer beware" does not absolve the seller of the responsibility to disclose material latent defects. Option B is incorrect because even if the buyer uses a home inspector, the seller still has an obligation to disclose material latent defects that they are aware of. Option C is incorrect because a fireplace defect that poses a fire hazard would indeed be considered a material latent defect that the seller should disclose to the buyer.