Which of the following is an example of a latent material fact?

A latent material fact refers to a defect or issue that is not readily observable during a typical inspection and may not be discovered until later. In this context, a leaking basement discovered during an inspection is indeed a latent material fact because it represents a significant issue that could affect the property's value and the buyer's decision, yet it might not be immediately apparent without thorough examination.

The other options describe situations that do not fit the definition of a latent material fact. For instance, a higher than average crime rate in the area is an external factor and is typically available through public records and statistics, making it readily observable for potential buyers. Previous renovations without permits may also be discovered through public records or disclosures required by sellers, meaning they are not hidden issues. A homeowner's personal preferences do not affect the structural or functional integrity of the property and are subjective, thus not categorized as latent material facts.