Which type of property must be disclosed to potential buyers if it has had past issues like flooding or mold?

The correct response highlights the importance of transparency in real estate transactions, specifically regarding material defects. A material defect refers to any issue that could significantly affect the value or safety of a property, or that would be relevant to a buyer's decision-making process. Past issues such as flooding or mold certainly fall under this category since they can have serious implications for a property's livability and structural integrity.

Disclosure of such material defects is not only a best practice for ethical business but is often also required by law in many jurisdictions, including Guam. Failing to disclose these issues could result in legal ramifications for the seller.

In contrast, household fixtures do not necessarily involve historical problems and are typically associated with what is included in the sale rather than the property's condition. Tax records provide information about property taxes and assessments but do not address past conditions that might affect a buyer's choice. Market appraisal reports assess current value but do not delve into the history of the property's defects. Thus, understanding and recognizing material defects is essential in real estate to uphold ethical standards and potential legal obligations.