Humber/Ontario Real Estate Course 2 Exam Practice

If a salesperson notices potential water damage that is hidden in a property being listed, what should they do?

1. Follow the seller's lead and ignore the issue

2. Inform the client about potential liability for not disclosing the damage

3. List the property without mentioning the damage

4. Report the issue to a local housing authority

5. Refuse to work with the seller

6. Seek independent advice regarding the damage

The correct answer is: Inform the client about potential liability for not disclosing the damage

In this scenario, it is essential for the salesperson to choose option B, which is to inform the client about potential liability for not disclosing the damage. It is crucial for the salesperson to act ethically and within the legal framework by ensuring that all material facts that could affect the property value or desirability are disclosed to potential buyers. Failure to disclose potential water damage can lead to legal repercussions for both the salesperson and the seller. By informing the client about potential liability, the salesperson upholds their duty to act in the best interest of their client and maintains transparency throughout the real estate transaction process. Options A, C, D, E, and F are not the most appropriate actions in this situation. Ignoring the issue, listing the property without mentioning the damage, reporting the issue to a local housing authority without informing the client, refusing to work with the seller, or seeking independent advice regarding the damage without involving the client do not align with the salesperson's duty to disclose material facts and act in the client's best interest.