Humber/Ontario Real Estate Course 1 Exam Practice

A seller who knowingly assures the buyer of no contamination when there is serious contamination present is guilty of:

1. Innocent misrepresentation

2. Intentional nondisclosure

3. Negligent misrepresentation

4. Unilateral mistake

5. Fraudulent misrepresentation

6. Accidental omission

The correct answer is: Fraudulent misrepresentation

The scenario presented involves a seller who actively assures the buyer that there is no contamination while knowing that serious contamination is actually present. This level of activity constitutes a deliberate act to deceive, which aligns with fraudulent misrepresentation. Fraudulent misrepresentation occurs when an individual knowingly makes false statements or provides misleading information to another party with the intention of inducing that party into an agreement. In this instance, the seller's assurance was made with full awareness of the contamination, thus demonstrating intent to deceive the buyer. This element of intentionality, coupled with the knowledge of a significant issue that could impact the buyer's decision, categorically classifies the behavior as fraudulent. Understanding fraudulent misrepresentation is crucial in real estate transactions since it underscores the importance of transparency and the legal repercussions sellers might face when they engage in deceptive practices. This also highlights the ethical responsibilities of real estate professionals to ensure that their clients provide truthful information.