Freehold
Study guide
Disclosure questions test one core duty: known material facts must be revealed proactively, even when nobody asks and even in an as-is sale. Latent defects — hidden problems a buyer couldn't spot — are the exam's favorite scenario. Federal law adds the lead-based paint disclosure for pre-1978 housing. Learn what must be disclosed, what merely should be recommended for inspection, and where to send buyers for stigma and registry questions.
Key vocabulary: Property Disclosures glossary (9 terms)
Every Freehold question shows why the right answer is right — and cites its source.
Federal law requires a lead-based paint disclosure for residential dwellings built before what year?
1978 — The Residential Lead-Based Paint Hazard Reduction Act requires sellers and landlords of housing built before 1978 to disclose known lead-paint hazards and provide the EPA pamphlet, because lead paint was banned that year.
Source: Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. §4852d)
A material fact affecting a property's value or desirability must be disclosed:
Even if the buyer never asks about it — Material facts must be affirmatively disclosed to buyers regardless of whether they ask, because they affect value or desirability. Concealing a material fact can constitute misrepresentation or fraud.
Source: PSI National Real Estate Exam Content Outline §6 Property Disclosures
A seller knows the basement floods every spring, but the damage is not visible during a showing. This is an example of:
A latent defect that must be disclosed — A latent defect is a hidden problem not discoverable by ordinary inspection. Known latent defects that materially affect the property must be disclosed, since buyers cannot reasonably discover them on their own.
Source: PSI National Real Estate Exam Content Outline §6 Property Disclosures
When a buyer asks whether any registered sex offenders live nearby, the licensee's best practice is to:
Direct the buyer to the official public registry — Licensees should refer buyers to the official sex-offender registry rather than research or characterize the data themselves. This answers the buyer's concern without risking inaccurate statements or fair-housing issues.
Source: PSI National Real Estate Exam Content Outline §6 Property Disclosures
Radon, an environmental hazard found in some homes, is best described as:
A colorless, odorless radioactive gas that enters from the soil — Radon is a naturally occurring radioactive gas that seeps from soil into buildings. Because it is colorless and odorless, testing is the only way to detect it, and prolonged exposure increases lung-cancer risk.
Source: EPA — A Citizen's Guide to Radon