What legal principle requires a seller to address known defects in a property?

The legal principle that requires a seller to address known defects in a property is the warranty of habitability. This principle asserts that a property must meet certain living standards and be fit for habitation. When a seller is aware of defects that could affect a buyer's ability to live in or use the property safely and effectively, they have a legal obligation to disclose these issues.

The warranty of habitability is commonly invoked in residential real estate transactions, where it protects buyers from acquiring properties with serious issues that could compromise their living experience. This principle often entails ensuring that essential services such as plumbing, heating, and electrical systems are functional and that the structure is free from hazardous conditions.

The other options do not pertain to the obligation of sellers to disclose known defects. Rights of first refusal concern the right to purchase before others, adverse possession relates to gaining ownership through continuous possession, and escrow refers to an arrangement where a third party temporarily holds funds or properties until certain conditions are met. None of these terms address the seller's responsibility for known property defects directly.