BC Real Estate Trading Services Licensing Examination

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A seller informs their real estate licensee that the basement foundation has a significant crack that leaks during heavy rain, but it has been dry-walled over and is not visible. Which of the following statements correctly describes the licensee's duty regarding this information?

The licensee must respect the seller's confidentiality and not disclose the defect unless asked directly. This is a material latent defect, and the licensee has an independent duty to disclose it in writing to all potential buyers, even if the seller objects. The licensee should advise the buyer to get a property inspection but is not required to disclose the specific issue. The licensee only needs to disclose the defect if the buyer makes their intention to finish the basement known.

Correct Answer:

This is a material latent defect, and the licensee has an independent duty to disclose it in writing to all potential buyers, even if the seller objects.

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