A buyer, Peter, is purchasing an older detached home at 888 Hillside Drive, Kelowna. Peter's licensee, Liam, is aware that the property has an old, buried heating oil tank in the backyard, which is known to be a significant environmental hazard and liability if it leaks. The seller has explicitly chosen not to disclose this on the Property Disclosure Statement. What is Liam's obligation in this scenario?

Question: A buyer, Peter, is purchasing an older detached home at 888 Hillside Drive, Kelowna. Peter's licensee, Liam, is aware that the property has an old, buried heating oil tank in the backyard, which is known to be a significant environmental hazard and liability if it leaks. The seller has explicitly chosen not to disclose this on the Property Disclosure Statement. What is Liam's obligation in this scenario?

Answer options: ✅ Liam must disclose this latent defect to Peter, even if the seller is unwilling, as it is a material latent defect that could pose a danger or render the property unfit for habitation.

• Liam is bound by client confidentiality and cannot disclose information that the seller has intentionally withheld from the PDS.
• Liam should advise Peter to conduct a soil test as part of his due diligence, without revealing the specific reason for the recommendation.
• Liam must terminate his agency agreement with the seller if the seller refuses to disclose the buried oil tank.

Correct answer: Liam must disclose this latent defect to Peter, even if the seller is unwilling, as it is a material latent defect that could pose a danger or render the property unfit for habitation.

Explanation: Licensees have a duty to disclose all material latent defects that they are aware of, irrespective of whether the seller has chosen to disclose them. A material latent defect is one that cannot be discovered by reasonable inspection and renders the property dangerous or unfit for habitation, or is very expensive to repair. (Real Estate Services Rules, 5-13 - Disclosure of latent material defects)