What must be disclosed to the buyer regarding MUD indebtedness?

The correct information regarding MUD (Municipal Utility District) indebtedness is that it can affect property taxes. MUDs are created to finance public improvements in certain areas, and the costs incurred by the district are often repaid through taxes assessed on the properties within the district. Therefore, disclosing this aspect is crucial, as buyers should be aware that purchasing a property in a MUD may lead to higher property taxes due to the debt service associated with the improvements financed by the MUD. This transparency allows buyers to make informed decisions when considering the overall costs of property ownership in that area.

The other options do not accurately reflect the critical nature of the disclosure related to MUD indebtedness. While it is true that buyers should understand their contractual obligations, the potential for higher property taxes directly impacts their financial responsibilities and is a more pressing concern for them to consider.