Leasing License Practice Exam

An occurrence on a property such as murder or suicide is classified as?

1. deferred maintenance

2. latent defect

3. stigmatized property

4. material defect

The correct answer is: stigmatized property

The classification of an occurrence on a property such as murder or suicide as stigmatized property comes from the concept that the event has the potential to negatively affect the perception of the property's value. Stigmatized property refers to real estate that has experienced an event that, while not physically impacting the property itself, can lead to public unease, fear, or a belief that the property is undesirable due to its association with the traumatic or violent events. In this context, though the physical structure of the property may remain unaffected, the emotional and psychological implications of such occurrences can lead buyers or renters to avoid the property, regardless of its actual condition or market value. This is distinct from other types of defects or conditions. Deferred maintenance involves the failure to adequately maintain property features, latent defects refer to issues that are not immediately observable and can affect the property, and material defects pertain to significant flaws in the property that affect its value or livability. None of these terms encompass the emotional stigma associated with the site of tragic events in the same way that stigmatized property does.