Sandra is selling her four-unit residential building in Kearney, Nebraska. She is aware that the basement of one unit has experienced recurring water intrusion after heavy rains, but she believes the issue is minor and has never had it formally repaired. Her broker, Kevin, advises her that because the water intrusion has never caused structural damage — as confirmed by a contractor's verbal assessment — she is not required to disclose it on the Seller Property Condition Disclosure Statement. Which statement most accurately reflects Nebraska law in this situation?

Correct Answer

A) Kevin is incorrect because Sandra must disclose all known material defects, including recurring water intrusion, regardless of whether structural damage has occurred.

Under the Nebraska Seller Property Condition Disclosure Act (Neb. Rev. Stat. §§ 76-2,120 to 76-2,130), sellers are required to disclose all known material defects and conditions affecting the property. Recurring water intrusion is a known condition that a reasonable buyer would consider material, regardless of whether it has yet caused formal structural damage. The disclosure obligation is triggered by the seller's knowledge of the condition, not by the severity of resulting damage or the existence of a written inspection report. Kevin's advice is legally incorrect and could expose Sandra to liability for fraudulent concealment.