A salesperson representing the seller is aware of a significant water infiltration issue in the basement of a property that was recently repaired. The seller has instructed the salesperson not to disclose this information to potential buyers. What is the salesperson's ethical and legal obligation in this situation?

Question: A salesperson representing the seller is aware of a significant water infiltration issue in the basement of a property that was recently repaired. The seller has instructed the salesperson not to disclose this information to potential buyers. What is the salesperson's ethical and legal obligation in this situation?

Answer options: ✅ The salesperson must disclose the latent defect to all potential buyers, even against the seller's instructions, due to their professional obligations under REBBA 2002.

• The salesperson should disclose the information only if a potential buyer specifically asks about water damage or basement issues.
• The salesperson must follow the seller's lawful instructions and keep the information confidential, as their primary duty is to their client.
• The salesperson is permitted to disclose the information only if they believe it poses a serious safety risk to future occupants.

Correct answer: The salesperson must disclose the latent defect to all potential buyers, even against the seller's instructions, due to their professional obligations under REBBA 2002.

Explanation: Under the Real Estate and Business Brokers Act, 2002 (REBBA 2002), registrants have a legal and ethical obligation to disclose all material facts, including latent defects known to them, even if such disclosure is contrary to the instructions of their client. This is a fundamental duty to promote honesty and transparency in real estate transactions, protecting consumers from material misrepresentation.