Every neighborhood seems to have that one house that is a little different than the rest, even a little scary. This is the house that children will dare each other to go up to at night or even in the day. We’ve all seen these houses they speak to our primal selves telling us to stay away for nightmares surely must exist behind the closed front door. This is the house that you may picture as being haunted. However, what about the one next door that looks so normal and even inviting? Surely you wouldn’t mind going into that house. What if that normal looking house is your new home? What if your new home is haunted? It may surprise you to hear that our legal system has developed ways of dealing with real estate that may have more of a past then you bargained for.
To discover the role our legal system plays first we will consider psychologically impacted/stigmatized property, this consists of property where: murders have occurred, suicides, sexual assault, or frequent burglaries, etc. (58 UCLA L. Rev. 281). States have enacted statutes that deal with so called stigmatized property that specify the duty a seller has to disclose the property’s past to the prospective buyers. Surprisingly paranormal phenomena may in some states be something that needs to be disclosed to prospective buyers.
The second place we will look to see how the law deals with paranormal phenomena is in regards to haunted houses. For purposes of this discussion a haunting is defined as “recurrent phenomena reported to occur in particular locations, including sightings of apparitions, strange sounds, movement of objects and other anomalous physical and perceptual effects.” (DEAN RADIN, THE CONSCIOUS UNIVERSE 5 (1997). What happens if you find that your new home isn’t quite as “vacant” (Stambovsky v. Ackley, 169 A.D.2d 254, 260 (N.Y. App. Div. 1991) as you expected?
The courts solution for one new home owner when he discovered he was living with a ghost may surprise you. Imagine if you will that you’re just moving into your new home when the neighbor arrives at your door. They tell you that a gruesome murder of a family occurred in your brand new living room. Do you still want to live in your new house? This is what is known as psychologically impacted property. The theory is that if a murder, or some other gruesome act occurred on the property it’s going to diminish the property value because the property is going to become stigmatized and no one is going to want to live there.
In Reed v. King (Reed v. King, 145 Cal. App. 3d 261 (Cal. Ct. App. 1983), a situation similar to the hypothetical above occurred when Reed learned from a neighbor that ten years prior to her moving into her new home a woman and her four children had been murdered in the house. Needless to say Reed wasn’t too happy and took the seller to court. The court found that in general, a seller of real property has a duty to disclose: where the seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to him and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer (Id. at 265.).
In this situation the court stated that the murder of innocents is highly unusual in its potential for so disturbing buyers they may be unable to reside in a home where it has occurred. This fact may foreseeably deprive a buyer of the intended use of the purchase. Murder is not such a common occurrence that buyers should be charged with anticipating and discovering this disquieting possibility. Accordingly, the fact is not one for which a duty of inquiry and discovery can sensibly be imposed upon the buyer. (Id. at 267.)
In Reed the court clearly recognized the effect murders had on the property even though they were in the past. But what does the history of murder do to the current home owners’ use of the property? Clearly the current home owner can still live in the house and if it lacks any physical defects. However, if we follow the courts reasoning in Reed it is clear that the very fact that murders occurred in the house make it unusable for the current home owner despite the lack of any physical defects. This shows that the court at least in this case does recognize that the history of a property can have an effect on prospective buyers despite the property being free of any physical defects. Following this same logic it would seem that courts shouldn’t have a problem deciding that a house’s history of being haunted might also make it unusable for a prospective buyer. A past murder and a haunting are similar in the fact that they can make a prospective buyer uneasy about making that particular house a home.
Another instance of what could make a property become stigmatized occurred when Deborah Carven, nine years after building her home discovered while digging in her yard, bones and casket remains. (Margaret Cronin Fisk, This Old House is Haunted: Spooked Owners Sue, SAN FRANCISCO RECORDER, Jan. 17, 2001, at 1). The developer of the residential lot had decided that instead of moving an old family grave yard located on the property that he would simply bull doze over the head stones and bury them in the ground therefore concealing it from the buyers. The Carven’s claim they have experienced paranormal activity and believe that the presence of the grave yard diminishes the value of their property. (Carven v. Hickman, 135 Md. App. 645, 662-63 (Md. Ct. Spec. App. 2000).
While this case is arguably different from the previous case, and as will be shown, different from the following case, it serves as an example that when a property has a history of bodies buried on it or that murders took place this will affect a prospective buyer’s decision and is something that sellers should be made to disclose to prospective buyers. If the Carvens had known there were bodies buried on their property before they bought the property they may not have gone through with the purchase. However, it does demonstrate the power the knowledge of a property’s history can have on the home owners. After the Carvens discovered the bodies their home became less usable to them then it had previously been for years.
This case identifies the essence of stigmatized or psychologically impacted property which is that a dark secret has been revealed that turns someone’s dream home into a nightmare. Without the knowledge of this secret the property appears to be capable of use and enjoyment by prospective buyers. However, once it gets out that there’s bodies in the back yard or a gruesome murder occurred in the nursery the property immediately becomes less likely to be used and enjoyed by prospective buyers.
Many states have enacted statutes to clearly spell out what needs to be disclosed to potential buyers. In general it is only material facts that need to be disclosed to potential buyers. The statutes often specifically state what doesn’t count as a material fact. An example of this can be found in Minnesota’s statute which expressly states that there is “no duty to disclose perceived paranormal activity” (Minn. Stat. Ann. §513.56 (West). See also R.I. Gen. Laws Ann. § 5-20.8-6 (West). or a Massachusetts statute that states that there is no duty to disclose “that the real property has been the site of an alleged parapsychological or supernatural phenomenon.” (Mass. Gen. Laws Ann. ch. 93, § 114 (West).
However, there are also statutes enacted in various states which require the seller to disclose information to a potential buyer if they specifically ask for it. (Okla. Stat. Ann. tit. 59, § 858-513 (West) (that knowledge of such factor is important to the person’s decision to purchase or lease the property, the licensee shall make inquiry of the owner and report any findings to the purchaser or lessee with the consent of the owner and subject to and consistent with applicable laws of privacy; provided further, if the owner refuses to disclose, the licensee assisting the owner shall so advise the purchaser or lessee).Despite these statutes the following case describes what one court did in response to stigmatized property.
In the New York case of Stambovsky v. Ackley (Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. App. Div. 1991). the court made an unprecedented conclusion and allowed for the rescission of a contract for the sale of a home on the basis that “the premises (weren’t) vacant.”(Id. at 260.) Perhaps the most telling part of this case is that the “defendant is estopped to deny their (poltergeists) existence and, as a matter of law, the house is haunted.” (Id. at 256) In this case, the Plaintiff, after purchasing the property found out that it was allegedly haunted. This had been a fact that the seller publicized nationally and locally. However, the Plaintiff had no knowledge of this prior to purchasing the home because he wasn’t from the area. After learning that the house was haunted the Plaintiff filed suit.
The opinion points out that the reputation of the house as being haunted would affect the property value and its ability for resale. (Id. at 675) Therefore the contract cannot be upheld because the house isn’t as the parties bargained for. This case illustrates the effect a supposed haunted house can have on a potential buyer. Despite the inability to prove that ghosts exist or that the house was really haunted the court still accepted the haunting as truth and allowed for the rescission of a contract. Potentially, this opens the door for all manner of paranormal phenomena to make its way through the court house doors.
As can be shown by these cases the courts do play a crucial role when a house’s history involves a few skeletons in the closet (sometimes literally) in pursuing justice, and helping new home owners who may have purchased more than they bargained for. If the courts weren’t able to step in, in cases like this it would lead to many people second guessing buying a house that they don’t know the complete history of. It would also undermine the legality of contracts as people would be agreeing to purchase a house that they really don’t want and is essentially different than what they are bargaining for. Perhaps as a preventative measure it would be more helpful if sellers were required to disclose if a property has a reputation of being haunted.
It is also interesting to note that it’s not just new home owners who are finding out their new home is haunted. In Texas there is a court house in which the Sheriff, the District Clerk, and the District Attorney have all experienced something of a paranormal nature. (Mary Alice Robbins, Things That Go Bump in the Night Ghost Stories Abound at the Navarro County Courthouse, TEXAS LAWYER, Aug. 21, 2006, at 8.) There is also a law office in Texas that is supposedly haunted. (Lisa Fipps, San Antonio Solo Shares Office with the Otherworld, TEXAS LAWYER, Oct. 29, 2001, at 54). As well as many well-known supposedly haunted locations around the US and the world.
Before moving into a new home do a little research, ask some questions, listen to your instincts. That is if you don’t want to move in with a ghost.
*Please note this article isn’t intended as legal advice.*