Humber/Ontario Real Estate Course 4 Exam Practice

What liability does a seller face if UFFI is found post-closing?

1. The seller is not liable as the discovery was post-closing.

2. Legal action is unlikely as UFFI isn't banned.

3. Seller faces potential legal action due to false warranty.

4. Buyer assumes responsibility as caveat emptor applies.

The correct answer is: Seller faces potential legal action due to false warranty.

The correct answer highlights that a seller could face potential legal action due to false warranty if urea-formaldehyde foam insulation (UFFI) is discovered after closing. When a seller makes a representation about the property, such as disclosing whether or not UFFI is present and later it is found that this information was false or misleading, they could be held liable for breaching those representations. This possibility of liability stems from the legal concept known as "misrepresentation," where a seller's failure to disclose material facts—or the presentation of false information—can lead to legal claims from the buyer. This option emphasizes the responsibilities that sellers have when selling their properties, particularly in terms of accurately disclosing known hazards or defects. Given that UFFI can pose health risks, the presence of false information about it can significantly impact buyer decisions and lead to potential legal repercussions for the seller. The other options outline different perspectives but do not accurately address the legal responsibilities encapsulated in real estate transactions. For instance, while it might seem appealing to think the seller wouldn’t be liable post-closure, the nature of misrepresentation keeps that liability intact regardless of when UFFI is discovered. Legal action not being likely simply overlooks the responsibilities surrounding disclosure and gives a false