What are a licensee's disclosure obligations regarding stigmatized properties?

The appropriate understanding of a licensee's disclosure obligations regarding stigmatized properties hinges on the nature of stigmatization and its relevance to the buyer's decision-making. While it might be tempting to think that a licensee need not disclose certain types of information, particularly if those factors do not have a physical impact on the property, this approach overlooks the underlying ethical considerations and obligations that impact the real estate profession.

Stigmatized properties typically involve issues that may not affect the physical condition of the property but might impact its desirability or marketability due to historical events, crime, or other factors perceived negatively by prospective buyers. Simply because these stigmatizing factors don't present as physical defects does not exempt a licensee from understanding their implications.

To maintain professionalism and transparency, it is generally expected that a licensee should disclose all known stigmatizing factors that could influence a buyer’s decision, even if these factors do not involve any physical defects in the property itself. This adherence to full disclosure supports a trustworthy relationship and aligns with the broader standards of the real estate industry, which strives to prioritize ethical dealings and consumer protection.