A seller, Emily, is listing her home at 456 Cedar Avenue, Burnaby. She informs her licensee, David, that a murder-suicide occurred in the master bedroom five years ago. Emily is concerned this may impact the sale price and asks David if she needs to disclose this information to potential buyers. What is David's professional advice to Emily regarding this situation?

Question: A seller, Emily, is listing her home at 456 Cedar Avenue, Burnaby. She informs her licensee, David, that a murder-suicide occurred in the master bedroom five years ago. Emily is concerned this may impact the sale price and asks David if she needs to disclose this information to potential buyers. What is David's professional advice to Emily regarding this situation?

Answer options: ✅ Advise her that this is a 'stigmatized property' and while not a physical defect, it should be disclosed as a material fact to avoid potential future disputes.

• Tell her that only physical defects need to be disclosed, so she is not obligated to mention past events.
• Suggest she only disclose it if a buyer specifically asks about the property's history, to avoid deterring potential offers.
• Advise her to disclose the information only if the property appraisal comes in lower than expected.

Correct answer: Advise her that this is a 'stigmatized property' and while not a physical defect, it should be disclosed as a material fact to avoid potential future disputes.

Explanation: While stigmatized properties do not have physical defects, events that occurred on the property can be considered material facts that would influence a reasonable buyer's decision. Licensees should recommend disclosure to ensure transparency and avoid misrepresentation.