IF YOUR HOUSE IS HAUNTED, DO YOU HAVE A DUTY TO DISCLOSE IT WHEN YOU SELL IT?
A New York appellate court famously allowed a purchaser to rescind (cancel) his contract to purchase a house after he ascertained that the house was widely reputed to be possessed by poltergeists. The poltergeists were reportedly seen by the seller and members of her family on numerous occasions over the course of nine years. The court noted that the seller deliberately fostered the public belief that her home was possessed: “Having undertaken to inform the public-at-large, to whom she has no legal relationship, about the supernatural occurrences on her property, [seller] may be said to owe no less a duty to her contract vendee.” Stambovsky v.Ackley, 572 N.Y.S.2d 672 (N.Y. App.Div. 1991).
The lesson of the Stambovsky case is that if you live in a haunted house, and if you publicize it, you might have a duty to disclose it when you go to sell it.
Is this holding an aberration? Houses that are supposedly haunted, or that have been psychologically impacted by some real or suspected event that left no physical impact of any kind – for example, a murder or a suicide, or the fact that a previous owner suffered from AIDS -- are called “stigmatized properties.” Some states have enacted statutes governing the duty of sellers and their agents to disclose stigmatizing events that occurred in the house being sold (some of the statutes excuse any duty of disclosure, others require disclosure), but generally, the trend in the law is to move away from “caveat emptor” (let the buyer beware) and to impose greater duties of disclosure of such events on the seller and his or her agent. When in doubt, disclose.
Currently, Pennsylvania does not impose such a duty. In Milliken v. Jacono, 2012 Pa. Super. 284 (2012), the buyer of a house learned three weeks after moving in that a murder-suicide occurred there the previous year. The Pennsylvania Superior Court held that sellers and their agent had no duty to disclose this fact to the buyer. The court noted: “If psychological defects must be disclosed then we are not far from requiring sellers to reveal . . . that the house was built on an old Indian burial ground.”
But, the Pennsylvania Supreme Court is currently reviewing the decision in Milliken v. Jacono, so the law in Pennsylvania could change at any time. In order to be certain that you have complied with your legal duty when selling a stigmatized property, consult an attorney.