After entering into an exclusive Listing Agreement, a seller tells their salesperson that some water damage history, which was present before their ownership, should not be disclosed in the listing. What is the salesperson's ethical obligation in this situation?

Question: After entering into an exclusive Listing Agreement, a seller tells their salesperson that some water damage history, which was present before their ownership, should not be disclosed in the listing. What is the salesperson's ethical obligation in this situation?

Answer options:

• The salesperson must follow the seller's instructions to maintain client confidentiality and only disclose what is explicitly permitted. ✅ The salesperson should disclose the water damage history if they believe it is a material fact, even if the seller objects, to fulfill their duty of care.
• The salesperson is only obligated to disclose issues that occurred during the seller's ownership.
• The salesperson should advise the seller that omitting this information is acceptable as long as a buyer does not directly ask about it.

Correct answer: The salesperson should disclose the water damage history if they believe it is a material fact, even if the seller objects, to fulfill their duty of care.

Explanation: Salespersons have an obligation to disclose material facts to all parties to a transaction, even if their client attempts to conceal them. A material fact is information that would influence a reasonable person's decision to buy, sell, or lease, as required by the Code of Ethics under REBBA, 2002.