Who you gonna call if the house is haunted?
Since writing about a seller’s legal obligation to disclose whether a murder has been committed at their home to a potential buyer, I have received further inquiries regarding other psychological stigmas that might have to be disclosed. This includes whether a house is haunted, whether the home was a house of prostitution or a violent home invasion had been committed in the past.
Between 1977 and 1989, Helen Ackley claimed that her home in the town of Nyack, New York, was haunted. She would tell the media about incidents such as her bed being shaken each morning by a poltergeist ghost. She even received $3,000 from Reader’s Digest for writing an article “Our Haunted House on the Hudson”, which was published in May, 1977.
However, when she sold the home to Jeffrey Stambovsky in 1990, she did not disclose anything about the house being haunted. Stambovsky tried to cancel the contract when he learned about the haunting story. At trial, the court said it was the buyer’s responsibility to do this type of due diligence before buying the home, so under the concept of caveat emptor (“Let the buyer beware”), the buyer lost. Stambovsky appealed.
At the appeal, heard July 18, 1991, Judge Israel Rubin wrote the majority opinion. The court placed significant weight on the fact that Ackley had not only made claims about the house being haunted, she was also paid for it. The court further concluded that regardless whether the house was truly haunted or not, the fact that it had been widely reported as being haunted greatly affected its value. In addition, as Stambovsky was not a local resident of the Village of Nyack, he could not readily learn that the house was haunted just by inspecting it.
The court said as follows: “Where, as here, the seller not only takes unfair advantage of the buyer’s ignorance but has created a condition about which he is unlikely to inquire, then enforcement of the contract is offensive to the court’s sense of equity.”
One of the justices noted, “who you gonna call?” if you are concerned about whether a house might be haunted. Several other humorous references were made to the 1984 Movie “Ghostbusters”, in the decision. Judge Rubin himself said that while it appeared that the buyer did not have a “ghost of a chance’, he was moved by the “spirit of equity” in making his decision.
People ask me whether these things should matter to people, or are they just superstitions. The Chinese and now many westerners place importance about the ancient concept of Feng Shui when designing or buying a home and bring consultants in during the home inspection for advice before making their purchase decision. Many will not buy a property if the number 4 is part of the address.
Interestingly, one of the later interested buyers of this home was the amazing Kreskin, who was interested precisely because of the haunted claim. Perhaps one could argue that the reputation of the home might actually have increased its value.
Can you imagine hiring a psychic or medium to accompany your home inspector when viewing any property, to make sure that there are not only structural problems, but also any paranormal activity? Is that mould behind the wall, or goo from a goblin?
If any of these issues matter to you, whether for religious or superstitious reasons, the best way to protect yourself is to just put it in writing before you sign any real estate deal.
For example, insert a clause that says: “The seller warrants to the buyer that to the best of their knowledge, this property has not been stigmatized by any of the following acts or occurences: (then insert murder, suicide, natural death, haunted house, house of prostitution) that the buyer considers traumatic or horrific.” Then a seller will have to tell the truth, regardless what they may believe. Or just ask the neighbours.
Mark Weisleder is a lawyer, author and speaker to the real estate industry.
If you have any questions about real estate issues, email mark at firstname.lastname@example.org