If a licensee discovers a latent defect in a property, what should they do next?

When a licensee uncovers a latent defect in a property, the appropriate and ethical course of action is to discuss the issue with the seller and inform prospective buyers. Latent defects are issues that are not readily visible or discoverable through a normal inspection and can significantly affect a property's value or safety.

By discussing the defect with the seller, the licensee ensures that the seller is aware of the issue, allowing them to make informed decisions about how to address it—whether that means making repairs, disclosing the defect, or adjusting the sale price. Informing prospective buyers is vital as it maintains transparency and helps them understand any potential risks associated with the property. This strategy not only protects the interests of all parties involved but also upholds the licensee's legal and ethical obligations to disclose material facts.

Taking this route fosters trust and minimizes the risk of legal repercussions that could arise from failing to disclose significant property issues. The right approach helps ensure that the transaction proceeds on solid ground and that all parties have made informed choices based on comprehensive information.