A property manager in Calgary discovers that a tenant in one of the properties she manages is operating a small, legitimate home-based business that is technically prohibited by a clause in their residential lease agreement. The clause states 'no commercial activity on the premises.' The tenant is otherwise exemplary, pays rent on time, and the business causes no disturbance to neighbours. What is the property manager's primary ethical obligation in this situation?

Question: A property manager in Calgary discovers that a tenant in one of the properties she manages is operating a small, legitimate home-based business that is technically prohibited by a clause in their residential lease agreement. The clause states 'no commercial activity on the premises.' The tenant is otherwise exemplary, pays rent on time, and the business causes no disturbance to neighbours. What is the property manager's primary ethical obligation in this situation?

Answer options:

• Immediately issue a notice of termination for breach of lease.
• Inform the tenant that the lease must be amended to allow the business. ✅ Advise the owner of the situation and seek their instruction, explaining the implications.
• Ignore the minor breach as it is not causing any harm.

Correct answer: Advise the owner of the situation and seek their instruction, explaining the implications.

Explanation: The property manager's primary ethical and fiduciary duty is to act in the best interest of the owner. They must inform the owner of the lease breach, even if minor, and receive direction on how to proceed, while also explaining the potential consequences of each action, such as tenancy termination or amendment.