For the purposes of this chapter, an adverse material fact is information that negatively affects the value of the property or a party’s ability to perform its obligations in a real estate transaction. Adverse material facts include:

(1) Any environmental hazards affecting the property which are required by law to be disclosed;

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(2) Any material defects in the property;

(3) Any material defects in the title to the property which are anticipated to survive the closing; and

(4) Any material limitation on the client’s ability to perform under the terms of the contract.

Source: SL 1998, ch 229, § 2.