What must a licensee do if they are aware of potential defects that are not reported in the home inspection?

When a licensee is aware of potential defects in a property that have not been reported in a home inspection, it is crucial for them to disclose those defects to both the buyer and the seller. This action is grounded in the principles of transparency and honesty that govern real estate transactions.

Disclosure serves several important functions. It ensures that all parties are fully informed about the property's condition, which can influence the buyer's decision-making process and safeguard the seller from future liability claims. By addressing known defects, the licensee helps maintain trust in the transaction and upholds the legal and ethical obligations required in their role.

Simply discussing the issue with only the buyer would leave the seller uninformed about potential defects that could affect the sale, while dismissing concerns or notifying the real estate board does not address the immediate needs and responsibilities towards the buyer and seller in the transaction. Therefore, it is essential for the licensee to communicate these potential defects to both parties to ensure a fair and transparent real estate environment.