Sunday, November 6, 2011

Haunted Property

Most people are familiar with the stereotype of the spooky house on the block.  Perhaps there are a few gnarly old trees rotting in the front yard.  Maybe that busted out window in the back still has a couple of 2x4s nailed over it.  And there always seems to be a crow perched on the fence, cawing as you walk by.  You know, the one that everyone dares each other to ring the doorbell of on Halloween.  For the more intrepid, this may seem like the perfect dream house; but for the rest of the world, it holds a certain stigma that can seriously devalue a property.

A haunted house is merely one example of a stigmatized property.  Properties are considered stigmatized when some aspect of the property, other than its physical condition, would lead to it being shunned by potential buyers.  These tend to be issues that would affect the potential buyers psychologically or emotionally.  Having a death occur in the home is merely one example.  Any sort of notoriety that could draw unwanted attention to the home could land the property under the stigmatized label, or a history of problems that would cause buyers to perceive a future risk should they invest in the property.  The former home of a famous person or a property that was used in a movie could draw unwanted attention from nosy tourists.  And in some special cases like California, having an earthquake nearby is enough to stigmatize a property.

In the past, property transactions have been ruled by the saying: "caveat emptor" or "buyer beware!"  This means that your real estate agent does not have to disclose that a property is stigmatized, though they legally cannot lie to you should you ask a direct question.  Most states now have laws protecting buyers from a host of problems, but stigmatization isn't often covered.  The laws regarding stigmatized property differ from state to state and country to country.  In some states, an agent is only required to disclose that a property is stigmatized if a death occurred in the past 3 years.  Seeing as how the events leading to stigmatization don't often leave obvious physical changes on a property, the buyer is generally unable to tell that there is something "wrong" with the house upon a reasonable inspection.  It's not until the neighbor's gossip reaches their ears that they realize they got more than they bargained for.  By then, it's usually too late to seek legal action.

One noted exception is the case of Stambovsky v. Ackley.  Helen Ackley's house in Nyack, NY was touted as being home to a multitude of poltergeists.  Her and several family members had reported these findings to both local and national publications on multiple occasions.  Unfortunately, they were apparently not any publications read by Jeffrey Stambovsky.  After putting a down payment on the house, he sued to be released from the contract and have his money returned to him once he discovered the home's reputation.  In a surprising and often cited court decision, Stambovsky was awarded the money he sought.  The court felt that since the notorious house had been publicly advertised as haunted by the owner that it was to be considered "legally" haunted regardless of the actual ghostly content.  In other words, Ackley could not suddenly claim the opposite of her published words.  The house eventually sold to a brave soul who actually wanted it because of its ghastly reputation.

If you plan on selling a property with noted paranormal activity, it would be wise to consult your realtor and local law books to determine whether or not it’s appropriate to disclose the information to potential buyers.  You don’t want to chase them off or lower your property’s value unnecessarily, but you certainly wouldn’t want to find yourself in legal trouble which could have been easily avoided.  Or perhaps you are the potential buyer – in which case, do your homework and don’t be afraid to ask questions even if they seem a little nutty.  It’s better to find a home you’ll truly be happy with (ghosts or no ghosts) than a property with unexpected annoyances.


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