By John Stemlar, Sage Real Estate Advisors
Every now and then someone will ask whether a home seller or the listing agent is required to disclose to a prospective buyer that a house is haunted. Ok…no one really ever asks this, but it is a fun Halloween topic.
Seller disclosure laws vary by state. Georgia adopts a caveat emptor (“buyer beware”) standard. Georgia, however, DOES require known latent property defects to be disclosed to a prospective homebuyer. A defect is an adverse condition (e.g., a crumbling foundation) that a reasonable buyer would consider in a purchase decision. A defect is latent if a buyer could not reasonably be expected to discover it in a diligent investigation of the property (e.g., a crumbling foundation behind finished wall). The disclosure requirement applies to physical attributes of the property and its surrounding area, but not to a stigmatized property situation (like a murder scene or a haunting).
Georgia separately addresses the question of whether a death on the property must be disclosed. Georgia law requires sellers and agents to disclose to a prospective buyer that the home was the site of a homicide, suicide or accidental death, but ONLY if asked. So, what about a haunting? It remains an unanswered question in Georgia and in most states, and it’s easy to understand why. Laws and court decisions requiring such disclosures would necessarily put legislatures and judges on record as believing in ghosts.
An interesting New York case deals with the haunting issue. Stambovsky v. Ackley involved an out of town buyer of an old Victorian mansion who, prior to closing, learned that the home was rumored to be haunted and asked the court to rescind the purchase contract. Interestingly, the seller was the source of the home’s local reputation as a haunted house. The seller freely, publicly and regularly reported ghostly apparitions over the course of several years, clearly enjoying the home’s notoriety as a haunted house.
The court recognized that the mere stigma of a home being haunted could adversely impact its value. In addition, the court held that the seller, having perpetuated the rumors of ghosts, could not now deny that the house was haunted. For purposes of this case, the house was legally haunted. Even though New York law (like Georgia law) is caveat emptor with respect to seller disclosure, the court allowed the buyer to rescind the contract in the “spirit of equity.”
John Stemlar is a Principal and the Managing Broker at Sage Real Estate Advisors, a boutique Atlanta residential brokerage. He promotes the Lynwood Park neighborhood and the homes for sale in Lynwood Park at www.LynwoodParkHomes.com