In real estate disclosures, what term describes a defect that would significantly affect property value and must be disclosed?

• A. Latent defect
• B. Material defect
• C. Cosmetic defect
• D. Patent defect

Answer: (B)

A material defect is any problem with the property that would influence a buyer’s decision or the property's value, safety, or desirability, and therefore must be disclosed. This includes issues like a structurally unsound foundation, significant water damage, or termite damage—problems that would add substantial repair costs or affect the property's value. Cosmetic issues, such as chipped paint, typically don’t rise to the level of material defects because they don’t meaningfully affect value. Patent defects are obvious and easily observable, while latent defects are hidden, but the question focuses on defects that significantly affect value and must be disclosed, which is what “material defect” captures.