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Arizona's Seller Property Disclosure Statement (SPDS) must disclose:

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Question & Answer

Review the question and all answer choices

A

Only structural defects

Limiting disclosure to only structural defects would leave buyers uninformed about a vast range of material conditions β€” such as flooding history, neighbor disputes, pest infestations, zoning violations, or HOA litigation β€” that significantly affect property value and desirability but do not involve structural components.

B

All known material facts about the property

Correct Answer
C

Only items that cost over $500

A $500 cost threshold for disclosure has no basis in Arizona law or the SPDS framework; materiality is determined by the nature and impact of the condition on a reasonable buyer's decision, not by the cost of repair, meaning a $50 recurring plumbing leak that indicates a systemic problem must be disclosed just as much as a $10,000 foundation crack.

D

Nothing is required

Arizona law imposes an affirmative disclosure obligation on sellers of residential property, and claiming that nothing is required directly contradicts both the statutory framework and the established common law duty to disclose known material defects that a buyer could not reasonably discover through ordinary inspection.

Why is this correct?

Under Arizona law and the standards established by the Arizona Association of Realtors' SPDS form, sellers are required to disclose all known material facts that could affect the value or desirability of the property, encompassing a wide range of conditions including physical defects, legal encumbrances, neighborhood nuisances, HOA issues, environmental hazards, and past repairs. The materiality standard is objective β€” it asks what a reasonable buyer would consider important β€” not subjective to the seller's personal assessment of significance or cost.

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