Stigmatized Property and Nevada Non-Disclosure
Nevada law limits the duty to disclose certain non-physical 'stigma' facts about a property. This chapter explains the non-disclosure statute at NRS 40.770 and the licensee's disclosure duties.
The Non-Disclosure Statute (NRS 40.770)
Under NRS 40.770, a seller or licensee is generally not liable for failing to disclose that a property was the site of a death, a felony, or a similar event, or that a prior occupant had a condition such as HIV. These 'stigma' facts are treated as not material to the physical condition of the property, so their non-disclosure does not create liability. This statute is distinctive to Nevada.
What Must Still Be Disclosed
The non-disclosure statute does not relieve a licensee of the duty to disclose known material defects in the physical condition of the property. A licensee must still complete the Seller's Real Property Disclosure requirements and disclose known defects that affect value or use. The stigma exemption is narrow and does not extend to physical problems.
The Broker's Role
A Nevada broker should ensure affiliated licensees understand the boundary between protected stigma facts and material physical defects that must be disclosed. Misapplying the non-disclosure statute to hide a physical defect would violate the duty of honest dealing. Proper training reduces the firm's liability while respecting the statutory protection.