If a licensee learns of a known defect from a third party, what is the recommended action?

• A. Disclose to the buyer and document, and seek verification; maintain ethical duty.
• B. Do not disclose unless the seller confirms.
• C. Tell the third party to contact the seller.
• D. Ignore if not material.

Answer: (A)

This tests the duty to disclose known defects you become aware of, even when the information comes from a third party. When you learn of a defect, you don’t just file it away or wait for someone else to confirm it. You should verify the information to avoid spreading unproven claims, then disclose it to the buyer, and document what you learned and what you did about it. This approach protects the buyer’s ability to make an informed decision and demonstrates you’re handling the transaction honestly and with due care, which aligns with ethical obligations and professional standards in real estate practice.

Documenting the steps taken provides a clear record of due diligence in case questions arise later, and seeking verification helps ensure the defect is real or understood in its proper scope. It also reinforces your responsibility to deal fairly and transparently, rather than relying on someone else to raise the issue or ignoring information you already have.

Other options fall short because they delay disclosure, shift responsibility onto the seller or third party, or ignore known information. Disclosing only with seller confirmation, telling the third party to contact the seller, or ignoring the issue if you deem it not material all fail to meet the obligation to reveal known defects that could affect a buyer’s decision.