A salesperson discovers a structural defect in a property they are listing that was not disclosed by the seller. The seller insists that the salesperson not mention this defect to potential buyers, as it might deter offers. What is the salesperson's ethical and legal obligation in this situation?

Question: A salesperson discovers a structural defect in a property they are listing that was not disclosed by the seller. The seller insists that the salesperson not mention this defect to potential buyers, as it might deter offers. What is the salesperson's ethical and legal obligation in this situation?

Answer options: ✅ To disclose the material fact to all prospective buyers, regardless of the seller's wishes.

• To advise the seller that they cannot represent them if the defect is not disclosed.
• To only disclose the defect if a potential buyer specifically asks about structural integrity.
• To follow the seller's instructions, as the seller is the client.

Correct answer: To disclose the material fact to all prospective buyers, regardless of the seller's wishes.

Explanation: Section 21 of the Code of Ethics (O. Reg. 580/05, now TRESA) requires a registrant to disclose all material facts known to them about a property to a client or customer, except as otherwise provided by law. A structural defect is a material fact that must be disclosed.