Grace is selling her single-family home in Murray, Utah. The property is served by a private well, and Grace knows that a recent water quality test showed elevated arsenic levels slightly above the EPA action level. She discloses the well's existence on the Seller's Property Condition Disclosure form but does not mention the arsenic test results, believing the water quality issue is a separate matter. The buyer, Henry, purchases the property and later discovers the arsenic contamination. Under Utah law, which analysis most accurately describes the disclosure and liability issue?

Correct Answer

B) Grace violated her disclosure obligation because the arsenic test results constitute a known material defect that should have been disclosed on the property condition disclosure form

Under Utah Code Ann. § 57-27, the seller must disclose all known material defects in the property. A private well with documented arsenic levels above the EPA action level is a known material defect — Grace had actual knowledge of this condition through the test results. Disclosing the existence of the well without disclosing the known contamination is an incomplete and misleading disclosure. The arsenic issue directly affects the habitability and value of the property and is precisely the type of known material condition § 57-27 is designed to require sellers to reveal. Grace's selective disclosure strategy does not satisfy her legal obligation.