![\"Information](\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2018\/10\/stigmatized-property.jpg\")
<\/figure>\n\n\n\n\n\n\n\nMany of those movies,from the cult classic Beetlejuice<\/em> to the iconic 80s comedy Ghostbusters <\/em>to the children’s favorite Casper<\/em>, and the standby The Amityville <\/em>Horror, involve the haunting of houses. A favorite pastime for many teenagers around the country during this time of year is visiting haunted house attractions. But what happens when you find yourself sitting home alone at night, and a mysterious sound emanates from the attic, the television turns on of its own accord, and a door you swore you closed is now swung open? You\u2019re too sensible to believe in ghosts, right?<\/p>\n\n\n\n The paranormal makes\nskeptics of many of us and believers of just as many, but we won\u2019t get into\nthat here. What is not disputed is that places hold meaning in our memories,\nand sometimes, the events that occur in certain places leave them indelibly\nmarked. Most property owners spend many tranquil years in the family home,\nwhich may be passed down by will peacefully through generations. But for\nothers, the residence may be stigmatized by an event, such as a person\u2019s\nnatural death or a gruesome crime, or its location, such as atop an ancient\nburial ground.<\/p>\n\n\n\n If it spooks you to\nthink about moving into a home and finding out \u2013 too late! \u2013 that the last\noccupant met an untimely demise there, you\u2019re not alone. Perhaps the home\nlanguished on the market, so you took advantage of a scary good deal on a gem.\nYour new neighbors seem friendly and welcoming, but piqued your curiosity with\nodd comments about the former owners. <\/p>\n\n\n\n Especially if you\u2019re\nnot familiar with the area, the tragedy you later learn took place in your new\nhouse would not be common knowledge, and it might not have occurred to you to\nmake inquiries as to why the house took forever to sell, despite its great condition.\nDon\u2019t just rely on the seller and\/or your agent to tell you all you need to\nknow about the property. It pays \u2013 sometimes in feeling comfortable and secure\nin your new home, and sometimes in actual dollars! \u2013 to do a bit of groundwork\nyourself.<\/p>\n\n\n\n BUYER BEWARE<\/strong><\/p>\n\n\n\n Depending on where you live, any after-acquired knowledge might be something you\u2019ll just have to make peace with. Caveat emptor<\/em> \u2013 or \u201clet the buyer take care,\u201d according to Black’s Law Dictionary<\/em> \u2013 is the common law maxim that it is the onus of the buyer to discover any \u201cnon material defects\u201d of a property before purchasing. This runs counter to the principle of caveat venditor<\/em>, which states that the seller takes responsibility for defects or deficiencies. <\/p>\n\n\n\n Disclosure laws vary by\nstate, but typically require sellers of residential real property to deliver to\nthe buyer a written disclosure of known \u201cmaterial defects\u201d to the property.\nSeller disclosures serve to inform the buyer while also protecting the seller\nfrom future legal action for failure to disclose material defects [1]. <\/p>\n\n\n\n But what constitutes a\nmaterial defect? While the definition varies by jurisdiction, a material defect\nis commonly deemed to be a problem with the real estate that would have a\nsignificant adverse effect on the value of the property or that would post a\nrisk to the people occupying the property, such as a structural issue or\nenvironmental hazard [2]. <\/p>\n\n\n\n Yet, laws are not static, and thus subject to change, especially when it comes to determining what exactly constitutes a defect. Due to decisions of the court in the past 30 years, the protections of caveat emptor<\/em> have come under scrutiny, and individual states have created ways for buyers to take action to gain knowledge of non-material facts. <\/p>\n\n\n\n STIGMATIZED PROPERTY<\/strong><\/p>\n\n\n\n A danger to the safety\nof the potential buyer is not the only reason for a property to cause buyers to\nthink twice before submitting an offer. These days, a bad reputation may also\npresent a threat to the value of a home and the financial future of a potential\nbuyer.<\/p>\n\n\n\n Property with a non-material defect is often referred to in real estate as stigmatized property. \u201cStigmatized properties,\u201d according to REALTOR<\/em> magazine, \u201care homes where a real or rumored event occurred prior to the buyer\u2019s occupancy that didn\u2019t physically affect the property but could adversely impact its desirability,\u201d and thus, its value [3].<\/p>\n\n\n\n Stigmas include events\nsuch as a death, homicide, or a supernatural event (i.e. a belief that the\nhouse is haunted). Or they might be circumstances that expose a future occupant\nto potential danger. For example, property formerly involved with drug activity\nmight bring unwanted attention or uninvited guests to the home. <\/p>\n\n\n\n Along these lines,\nsellers may be required to disclose the house as a site of illegal drug production,\ndepending on the state\u2019s policy. Kansas does not demand a seller to disclose if\nthe house was the site of an illegal methamphetamine laboratory, but its\nneighbor Missouri does [4]. Washington, whose early adoption of a meth cleanup\ninitiative gave other states a model for their own initiatives, stipulates that\neven if the property is decontaminated, sellers must still disclose to\npotential buyers that the property was once used as an illegal drug\nmanufacturing site [5]. Some types of drug activity can pose a health threat to\nan unknowing occupant. <\/p>\n\n\n\n In addition to psychologically stigmatizing circumstances, such as a death or murder, a property might be susceptible to a public stigma, which poses a nuisance concern for a future occupant. A public stigma attaches to a property because the property or a real or rumored event that occurred on the property is well known to the public. The public successes of former inhabitants or the fandoms drawn to the set of their favorite film or television show might create tourist attractions that become nuisances to the property owner and his neighbors. See the Cracked<\/em> article from 2015 as evidence of how a public stigma affects the occupants of homes made famous by pop culture, like the homeowner who found herself with thousands of guests a day to her Goonies<\/em> home in the advent of Twitter and news of a remake [6].<\/p>\n\n\n\n Yet other properties\nfall under the umbrella of \u201cdebt stigmatized,\u201d whereby a new owner is\nsusceptible to nuisance if the previous owner has moved on to escape his debts,\nleaving the new occupant to deal with unwarranted harassment. <\/p>\n\n\n\n Stigmas sometimes even combine to doom a property as unsellable \u2013 as when a highly publicized murder produces a public stigma. In some cases, however, a high-profile death may, however, be what attracts a buyer in the first place. See Curbed<\/em>\u2019s reporting on 10050 Cielo Drive, a property that, even after the demolition of the house in which the Manson Family murdered pregnant actress Sharon Tate and four others, remains stigmatized, but managed to attract the likes of Nine Inch Nails frontman Trent Reznor [7].<\/p>\n\n\n\n PSYCHOLOGICAL IMPACTS<\/strong><\/p>\n\n\n\n No, psychological\nimpacts aren\u2019t hits to the head, exactly. A psychologically impacted property involves\na reputational, or other non-physical defect unrelated to the condition of the\nproperty, that may cause an emotional disturbance. This is where the ghosts\ncome into play. (For the record, state statutes do not address hauntings\nexplicitly, as they are considered an irrational fear. Even if the buyer\nbelieves in ghosts, so-called \u201cphenomena stigmas\u201d are still not considered\nmaterial in the eyes of the law, as they do not present physical harm [8]). <\/p>\n\n\n\n Psychological impact\nstatutes walk a thin line between protecting the seller and pleasing the buyer\nby offering procedures for uncovering a property\u2019s hidden defects. In most\nstates, common defects addressed by law include events such as suicide,\nhomicide, or other felony, and whether the owner or previous occupant contracted\nor died of HIV\/AIDS. However, not all states have psychological impact\nstatutes.<\/p>\n\n\n\n Many states\u2019 laws regarding psychologically impacted property do not consider the previously mentioned circumstances material fact, or a fact that is significant or essential to the issue or matter at hand, as these previous events do not affect the safety of the next owner. Instead of harming the buyer, these fact swill only harm the seller\u2019s chances of successfully selling the property. For example, a 2000 study by two Wright State University professors found that the psychologically impacted homes they studied took 45 percent longer to sell, and on average sold for about 3 percent less than other homes of the same value[9]. <\/p>\n\n\n\n Louisiana\u2019s policies\nare representative of what is typically covered by law in a majority of states.\nThe statues maintain that it is not a material fact if the occupant of the\nproperty was infected with AIDS, HIV, or any other disease highly unlikely to\nbe transmitted through the occupancy of the same place, or if the property was\nthe site of a homicide or other felony, or a suicide. The law also prohibits\ncauses of action against owners and their agents for failure to disclose\npsychological impacts (La. Stat. Ann. 37:1468). In general, the seller\u2019s\ninterests are well protected.<\/p>\n\n\n\n Some states, however,\nrequire disclosures that give more protection to the buyer. For example, in\nSouth Dakota, the owner must reveal whether a homicide or felony was committed\nat the property within the past 12 months (SDCL 43-4-44). Californians must\ndisclose deaths upon the property in the three years prior to the purchase date\n(Cal. Civ. Code 1710.2). Based on these disclosures, the buyer can terminate\nthe purchase.<\/p>\n\n\n\n A 2012 Pennsylvania case recently reaffirmed disclosure laws in that state. Disclosures in Pennsylvania relate to material defects in the construction and conditions of the property not readily observable, and do not address psychologically impacting circumstances. On appeal, the court in Milliken v. Jacono<\/em> decided that the disclosure of a murder-suicide is a slippery slope to other and potentially more subjective disclosures. The court noted that the stigma of psychologically impacted property decreases with time \u201cas the memory of the murder fades from public knowledge,\u201d and that forcing a seller to price a property below market value would unfairly advantage the buyer when the property value increases after public memory of the murder fades [2].<\/p>\n\n\n\n It is possible, though, for a court to deem apparently insignificant defects as material if the buyer can convince the court that the circumstances pose a financial or physical risk to the buyer, thus adding caveats to the application of caveat emptor<\/em>. One example is the case of Van Camp v. Bradford<\/em>. After discovering bars on the basement windows during a walkthrough, the buyer, a single mother with a teenage daughter, was told there was a break-in 16 years earlier. Later, she found out that a teenage tenant had been assaulted in the residence four months earlier and that the crime remained unsolved. Because of these circumstances, the buyer argued that the property was unsafe for habitation. The court agreed and determined that the crime should have been disclosed as a material defect, as it presented a danger to the safety of the new residents [8]. The court added that for caveat emptor<\/em> to apply in Ohio, a property defect must be discoverable upon inspection, the purchaser must have an opportunity to examine the property, and the vendor must not engage in fraud [10].<\/p>\n\n\n\n In the case of Reed v. King<\/em>, a homebuyer in California found that the seller did not disclose the fact that a woman and her four children were murdered in the home. The seller had even gone so far as to ask the neighbors not to disclose this fact either. The court ruled that the buyer could not have anticipated the discovery of the crime, so duty of inquiring about the possibility of murder cannot be imposed on the buyer. As the murders materially affected the market value and desirability of the home, the history of crime was labeled a material defect, and the buyer was able to rescind their purchase of the property [8].<\/p>\n\n\n\n In other instances,\ncourt decisions have upheld a seller\u2019s right to privacy in line with societal\nchanges. Take for example the disclosure of cases of HIV\/AIDS in a home. The\nfact that a previous occupant had this condition was not defined as a\npsychological defect until the late 1980s when homebuyers began to shun homes\nwith previous occupants infected with HIV\/AIDS due to a lack of understanding\nof how the disease was transmitted. The fear was that people could catch the\ndisease simply by occupying the same space as an infected person. <\/p>\n\n\n\n This fear lead to the case of Kleinfeld v. McNally<\/em>, where buyers in New York attempted to rescind a purchase contract for fear of contracting the disease themselves [11]. Occurrences such as this attracted the attention of Congress, and in 1988 the Fair Housing Amendments Act was amended, and HIV\/AIDS was declared a \u201chandicap\u201d that need not be disclosed. The states were prompt to follow, and in the following years, non-disclosure laws continued to be expanded [12].<\/p>\n\n\n\n CONCLUSION<\/strong><\/p>\n\n\n\n A recent social media\npost by realtor.com showed that, based on a survey conducted by Harris\nInteractive, 34 percent of sellers would tell potential buyers their house is\nhaunted, while 22 percent would say nothing. 27 percent of responders said they\nwould reveal all details, but only if asked. We won\u2019t judge (read: we\u2019re\ntotally judging) the 22 percent who reported they would say nothing [13].<\/p>\n\n\n\n The 27 percent of responders were perhaps the least at-risk for liability. Remember when we said earlier that state laws don\u2019t recognize hauntings? Consider the case of Stambovsky v. Ackley<\/em> (referred to as the Ghostbusters<\/em> ruling). Although the seller was vocal about her home\u2019s reputation as being haunted, the court found that the buyer, who was not local, had \u201cno reason to inquire\u201d about the supposed haunting beforehand, and \u201ccould not have discovered its presence through a reasonable inspection.\u201d The court subsequently supported rescission, or cancellation, of the purchase, saying the seller took unfair advantage of the buyer\u2019s ignorance [8]. In this case, the court came to the buyer\u2019s rescue. To be clear, the case was not a decision about recognizing the house as haunted, but rather a decision on the buyer\u2019s right to know about a property\u2019s reputation<\/em> and the seller\u2019s duty to disclose in New York [14].<\/p>\n\n\n\n While not all states\nrequire disclosure of psychologically impactful conditions, some specify that\ndisclosure isn\u2019t required, but if prompted, agents must answer truthfully (see\nMassachusetts Gen. Laws c.93, Sec. 114 and Connecticut Gen. Stat. 20-329ee for\nexamples). Again, it is the buyer\u2019s burden to ask these questions. Although\nowners and their agents in other states may refuse by law to disclose any\npotentially troubling details, the buyer can often draw conclusions based on\nthis refusal and conduct further individual research before committing to a\npurchase.<\/p>\n\n\n\n Although most states in the U.S. still operate under caveat emptor<\/em>, laws continue to evolve, increasing buyer protections against purchasing homes that could prove harmful to their physical and financial safety. However, it is still prudent to take initiative to protect yourself through individual investigation. Have a conversation with your real estate agent. Ask questions. And if all else fails, take to the internet. A simple Google search of the home\u2019s address can give insight into the property\u2019s past which may not be presented upfront at the time of sale. With the proper preparation and knowledge of local non-disclosure laws, there is no reason to stay up all night with a case of the creeps.<\/p>\n\n\n\n CITATIONS<\/strong><\/p>\n\n\n\n [1] https:\/\/www.zillow.com\/blog\/real-estate-disclosures-62807\/<\/a> <\/p>\n\n\n\n [2] https:\/\/www.lexology.com\/library\/detail.aspx?g=57acdcde-73ed-4369-9e40-08b75a6cd087<\/a><\/p>\n\n\n\n [3] https:\/\/magazine.realtor\/law-and-ethics\/law\/article\/2003\/12\/stigmatized-property-haunted-sales<\/a><\/p>\n\n\n\n [4] https:\/\/www.realtor.com\/advice\/sell\/weird-seller-disclosures\/<\/a><\/p>\n\n\n\n [5] https:\/\/www.americanbar.org\/content\/dam\/aba\/publications\/rpte_ereport\/2009\/october\/rp_gomez.pdf<\/a><\/p>\n\n\n\n [6] http:\/\/www.cracked.com\/article_21484_6-famous-houses-from-movies-that-ruined-owners-lives.html<\/a><\/p>\n\n\n\n [7] https:\/\/la.curbed.com\/2018\/6\/6\/17153870\/manson-sharon-tate-murder-house-cielo-drive<\/a><\/p>\n\n\n\n [8] https:\/\/www.americanbar.org\/content\/dam\/aba\/publishing\/rpte_ereport\/2017\/5-September\/haunted_house_ml.authcheckdam.pdf<\/a><\/p>\n\n\n\n [9] https:\/\/www.nbcnews.com\/business\/real-estate\/3-br-hot-tub-3-murders-how-homicide-homes-hold-f846521<\/a><\/p>\n\n\n\n [10] https:\/\/www.nar.realtor\/legal-case-summaries\/van-camp-v-bradford-ohio-court-reviews-duty-to-disclose-stigmatized-property<\/a><\/p>\n\n\n\n [11] https:\/\/www.americanbar.org\/content\/dam\/aba\/publishing\/probate_property_magazine\/rppt_mo_premium_rp_publications_magazine_2005_mj_perlin.authcheckdam.pdf<\/a><\/p>\n\n\n\n [12] https:\/\/www.uclalawreview.org\/pdf\/58-1-5.pdf<\/a><\/p>\n\n\n\n![\"\"](\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2018\/10\/stigmatized-property-2.jpg\")
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