Environmental

A Colorado property owner discovers their home has Chinese drywall (a defective product installed in the 2000s). The drywall emits sulfurous gases causing corrosion and health issues. This is:

ANot a material fact since it is a manufacturer's problem
BAn adverse material fact requiring disclosure that significantly affects the property's value and habitability✓ Correct
COnly a concern if the buyer is sensitive to chemicals
DCovered by the homeowner's standard insurance policy

Explanation

Defective Chinese drywall emitting sulfurous gases is a serious adverse material fact affecting the property's habitability, value, and the health of occupants. Colorado brokers must disclose known adverse material facts like this to prospective buyers.

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