VMM associate Katherin Valdez-Lazo, a member of the Business and Transactional Law and Real Estate practices, is interviewed in today's New York Post Article, "Your dream home might be haunted — and in these states, sellers don’t have to tell you."
The article can be read online here and below.
Your dream home might be haunted — and in these states, sellers don’t have to tell you
Thinking of buying a house? You might want to check if it comes with any spooky roommates.
As Halloween approaches, Zillow’s recent state-by-state analysis reveals a spine-chilling reality: In most of the US, sellers are under no obligation to disclose if their property has a haunted past.
Only New York, New Jersey, Massachusetts and Minnesota have legal provisions around haunted home disclosures.
In New York, pending deals for haunted houses can literally vanish. The famous 1991 New York case of Stambovsky v. Ackley — known as the “Ghostbusters ruling” — set the tone.
In that case, the court sided with a buyer who unknowingly bought a home in Nyack that was said to be haunted. The seller had openly boasted of the home’s poltergeist population but failed to mention it during the sale, leading the court to allow the buyer to rescind.
“If a seller has created and perpetuated a notion that the house is haunted, such information must be disclosed,” Katherin Valdez-Lazo, a real estate attorney with Vishnick McGovern Milizio LLP, told The Post. “But a mere suspicion of a ghost does not trigger the disclosure requirement.”
Valdez-Lazo expanded on the case, saying, “In Stambovsky v. Ackley, the court held that if a condition has been created by a seller that ‘materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care,’ such condition must be disclosed.”
The seller in the case had publicized her haunted home in both local and national media, but the buyer, new to the area, had no idea.
“The court sided with the purchaser, ruling that the contract could be rescinded because the house was legally haunted,” Valdez-Lazo added. “The seller owed the purchaser the duty to disclose information regarding the haunting to avoid taking advantage of the buyer’s ignorance.”
Neighboring New Jersey has a different policy. If a buyer asks about any supernatural presence, the seller must answer truthfully. Otherwise, they’re free to keep any ghostly details a secret.
But that’s more than most states offer, said Paul Koenigsberg of Koenigsberg & Associates.
“Everything about this subject is underpinned by the precedent set by Stambovsky v. Ackley,” he said. “Although this is often cited as an example that a seller can be held liable for not disclosing that a property is ‘haunted,’ it’s often lost to many that this was specifically because the seller publicly announced the fact beforehand but failed to disclose it during the sale.”
In most states, even grim events like murders are not required to be disclosed — unless specifically asked.
“For example, if someone were to experience ‘haunting’ in a house that wasn’t previously advertised by the seller as such, then they cannot sue,” Koenigsberg added. Properties impacted by a violent or tragic history are labeled “stigmatized,” he explained, adding that such attributes might devalue the property.
“Most people expect that if you are buying a house where a murder has occurred, you will get a deal,” Koenigsberg said.
“I have had many clients walk away from what otherwise would be their dream home because there was a murder in the house or a recent death.”
But for those undeterred by a home’s morbid history, these “murder houses” can come at a bargain.
Mortgage lender Jennifer Beeston, based in Florida, agreed, noting that buyers could leverage this for a discount.
“If the fact the house had a homicide in it does not bother you and you expect to live there for 10-plus years, it can be a great opportunity to get a deal,” she told The Post.
In California, deaths on the property must be disclosed if they occurred within the past three years, while in Alaska, it’s one year. But in states like Texas, sellers can keep any grisly secrets to themselves forever.
“The doctrine of caveat emptor (‘buyer beware’) warns buyers to always inspect the premises before purchasing,” Valdez-Lazo said.
So, if you’re in the market for a “stigmatized property,” it’s worth asking the tough questions — because, as the law stands, sellers don’t have to volunteer anything supernatural. Then again, who knows what really happens in the afterlife?
“You don’t stand a ghost of a chance in discovering whether a house is haunted just by inspecting it. Some ghosts may simply choose not to present themselves,” quipped Valdez-Lazo.
