Sarah, a licensed real estate associate, is contacted by her friend David who is interested in purchasing a duplex in Calgary. Sarah determines that she holds a significant financial interest in the specific duplex David is considering, as she is a part-owner through a family inheritance. Under the RECA Rules, what is Sarah's primary obligation regarding this situation?

Question: Sarah, a licensed real estate associate, is contacted by her friend David who is interested in purchasing a duplex in Calgary. Sarah determines that she holds a significant financial interest in the specific duplex David is considering, as she is a part-owner through a family inheritance. Under the RECA Rules, what is Sarah's primary obligation regarding this situation?

Answer options:

• She must immediately disclose her financial interest to David and recommend he seek independent legal advice, and then she may proceed to represent him. ✅ She must immediately disclose her financial interest to David and refuse to represent him in the purchase of that specific duplex.
• She can represent David as long as she ensures he gets the duplex at a fair market price.
• She must only disclose her interest if David directly asks her about any potential conflicts.

Correct answer: She must immediately disclose her financial interest to David and refuse to represent him in the purchase of that specific duplex.

Explanation: RECA Rules, specifically the Code of Conduct, require an associate to act honestly and with integrity, and to avoid conflicts of interest. If an associate has a personal interest in a trade in real estate, they must refuse to act on behalf of the client to avoid such a conflict.