Whether chains are rattling, the floor is shaking or there is simply the knowledge that an evil deed was committed on the premises, you could possibly be dealing with a haunted house, or a "stigmatized property" sale.
Since liability issues on these types of transactions vary from state to state - what is the guiding principal for selling a haunted house?
In 1991, a case in New York provided some legal precedent on the matter.
Stambovsky v. Ackley
The owner of a house, Helen Ackley had reported the existence of numerous poltergeists in her home and had, in fact, publicized these occurrences in Reader's Digest and a local newspaper on three occasions. As a result, the home was placed in a five-home walking tour in the city and received an enormous amount of publicity. She even referred to the home in a article as a "Riverfront Victorian with ghosts."
Some of the interactions Ms. Ackley described to reporters included ghosts waking her each morning by shaking her bed. When spring break arrived she loudly proclaimed to the spirits that she did not have to wake up early anymore. On this, she insisted that they listened to her requests and the bed immediately ceased all shaking.
Despite the local notoriety, an unknowing buyer, Jeffrey Stambovsky signed a contract to purchase the home. On an agreed upon price of $650,000 he made a $32,500 down payment. Since Mr. Stambovsky was not from the area he claimed to have ignorance of the widely known haunting tales.
When the buyer subsequently learned of the haunting stories, he filed for a request of the rescission of his contract for the sale and also sued for damages citing fraudulent misrepresentation on the part of Ackley as well as the Realtor®.
In ruling on this case, the court stated that since the existence of ghosts in the home had been widely reported, as a matter of law, the house was haunted.
However, the court dismissed the fraudulent misrepresentation action and stated that the Realtor® had been under no obligation to disclose the haunting to any potential buyers. The court affirmed that the law of caveat emptor (let the buyer beware) applied in this case so the buyer did not prevail.
Mr. Stambovsky subsequently appealed the case and won a reversal.
On appeal, the court stated that a "haunting" was not a condition that a buyer could fairly be able to ascertain through even the most thorough of home inspections. In this case, "the most meticulous inspection would not reveal the presence of poltergeists at the premises or unearth the property's ghoulish reputation in the community."
It further stated that the seller had taken unfair advantage of the buyer's ignorance. Since she had taken it upon herself to inform the community at large of numerous spirits roaming rampantly throughout the home, she owed no less to her perspective buyer.
The judge then rendered a somewhat entertaining opinion using the following phrases:
"In his pursuit of a legal remedy for fraudulent misrepresentation against the seller, plaintiff hasn't a ghost of a chance," I am moved by the spirit of equity," "In this instance - who you gonna call?" and "The notion that a haunting is a condition which can and should be ascertained upon inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent and quietly laid to rest."
I have no knowledge of whether or not the parties in question had any appreciation of the judge's sense of humor.
However, Mr. Stambovsky was finally let out of the deal and had his deposit fully refunded.
Copyright 2009 - Claudette Millette, Broker, Owner, TheBuyersCounsel - 800-392-1446 - E-mail
Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Shrewsbury, Sherborn, Southborough, Sudbury, Wayland, Westborough
Interesting and perfect timimg, have a great week!
Melissa:
This is a true tale that I found to be fascinating and it is intended to honor "Halloween" week. Thanks so much.
Hi Claudette:
I had read about this one.
Bottom line is, if in doubt, disclosed!
Have a Happy Halloween...
Hi, Toula:
It's interesting to me that the seller would have had any doubt in this case. How would she think that this buyer would not find out? You are right - disclose, disclose...
Claudette - Great post and very timely indeed. I really enjoyed the judges opinion.
I have toured houses where I have experienced the unusual. However, I try not to stick around long enough to find out whether it was my imagination, or there was more to the story. :-O
Just kidding of course, this could be a very serious matter. Especially, if the homeowner had been promoting the property as haunted. Best to disclose, and refer the listing to someone else. ;-)
Judy:
I know what you mean - some of the older homes can be pretty scary. Charming, interesting, but also, sometimes a bit creaky...
Claudette - lots of people are very skiddish about buying haunted houses... They are very nervous about them or so some have told me...
Fabulous post and interesting story Claudette! I may have to re-blog that on Halloween!
Kathy:
I would have to agree with them. I would be skiddish about it myself.
Melinda:
'So glad you liked it. Feel free to re-blog.
Claudette - Very interesting haunted case in New York. Thanks for sharing it with us non-locals.
Marc:
Yes, it was an interesting case. Thanks...
Claudette - very interesting and entertaining read! Just when you think you've seen it all...
Thanks for sharing!
After finding out what some of the notoriously haunted homes in New Orleans have sold for... I would be tempted to advertise it as haunted.
Lina:
It's pretty amazing, isn't it? Thanks so much...
Lane:
That could possibly be a good plan. I think this lady, Helen Ackley ended up doing just fine on the sale her home following all of the notoriety of this case. The magician, Kreskin was actually interested in it because of the haunting.
Spooky - that's what my 2-year old son would have said if he could read. I thought it was such a good blog in honor of Halloween. It had me going, ROFL when I read, "the Realtor® had been under no obligation to disclose the haunting to any potential buyers." I'm not sure why. It was just down right funny to me.
PS: I got your email from the other day. But didn't have time to respond at that moment. And of course I forgot all about it until your Spooky blog. No worries about it.
In Florida it is not required to disclose a stigmatized property. In fact, if you have a single agency agreement with the seller, I would think you could even get into some serious trouble by hurting them if you disclose such a thing. Even a crime, death, murder, suicide, former HIV occupant, etc are not considered to be material facts. So in Florida one has to be careful, even if you know the nosey neighbors will say something. Though hauntings were not specifically mentioned, without the seller's permission, watch what you say to buyers. That is my non-attorney/personal advice. Other states likely have different rules and statutes. In Florida, I would suggest that FAR members make use of the free REALTOR legal hotline to get guidance before they make any missteps.
Hi, Loreena:
I'd love to meet your son. I agree with you, that ruling does seem rather funny. But, in Massachusetts we are also not obligated to disclose any "ghostly" information about a property. I think the appellate judge came down harder on the seller since she had gotten so much publicity from the fact that the place was haunted.
Hi, John:
We have the same situation in Massachusetts, referred to as the stigmatized property rule, including all of the items you have just mentioned.
Hi Claudette~ I think the judge did the right thing by releasing him. A lot of people would not be comfortable purchasing a haunted home. That truly was an interesting case! Thanks for sharing!
Hi Claudette -- Lucky thing that judge ruled in the buyer's favor because if he didn't, the buyer probably could have gotten a mistrial for judicial prejudice, humor aside. What a hoot (no pun intended)! Made me smile!
Claudette - Interesting blog! Thanks for sharing!
I have not listed a haunted house, but have shown a few. In each case I just got out of there as fast as I could. I also called the listing agent to tell them something was not right and to be careful. I think they thought I was crazy in a couple of cases, but in one she knew something was wrong. I would not have sold any of them even if my client wanted the house, you could not pay me enough!
I've never seen or heard of a truly haunted house. I guess they're not very common, after all.
Vickie:
Yes, I agree with the (second) judge in releasing him from the contract. It's interesting that the first one did not.
Chris:
It was a bit of hoot - glad it made you smile.
Gina:
Your welcome.
Anna:
They must have been some pretty spooky houses to evoke such a strong reaction in you. I have shown some old houses, but never haunted (that I know of.)
Vickie:
I don't think they are very common - thankfully...
Claudette,
Is there a link to the Court ruling that you can post?
Brian
Great story Claudette! This is a perfect blog as we approach Halloween. I like the judges sense of humor:)
Brian:
Here it is:
The Case
Bill:
I am glad you liked it. I thought the judge was a riot as well. I only wonder how funny the seller thought he was after losing her case.
The perfect story for the Halloween season. See. . . judges DO have a sense of humor. Thanks for sharing.
Tom:
That judge certainly did. Think of it. They must see so much in their day-to-day that having a laugh over a haunted house case is probably a great release.
Gotta love the judges sense of humor.
I've never seen any physical signs of a house being haunted, but other agents I know and trust swear they have. EVeyrone once and a while, however, the hairs on the back of my neck will stand up for no reason....
great story for this time of the year. thanks for sharing.
Rich:
I haven't seen one either, but hairs standing up on the back of the neck? A number of issues with houses can cause that...
Roch:
Thanks for stopping by.
Claudette, really fantastic post. As you may or may not know..we have haunted houses on practically every corner here in Charleston, South Carolina so I had to re-blog your post. Thanks!
A timely post! In my second year of the business, I was in the process of removing condtions on the sale of a home to Buyers that lived right around the corner. Unbenknownst to all of us, a homicide had taken place two weeks earlier, in the exact same spot on the kitchen floor where I had so ironically commented, "This floor is so clean, you could eat off it!" When I went to my car to retrieve a tape measure, a friendly neighbor told me what had happened. Because I believe in full disclosure, I revealed this to my clients and we did research to confirm what was indeed our city's 33rd homicide of the year. We found this out by Googling the address and found all the information we needed. My clients decided to back out of the deal. They did not feel the information stigmatized the property, but were concerned for their kids if they heard from others at school. The good news is, they developed a deep trust in me and ended up buying a significantly more expensive home which suited them perfectly! My motto when dealing with buyers is disclose, disclose, disclose. It is far better than dealing with a headache afterward.
I think disclosure is important. We are always as tactful as possible. There are definately folks who are sensitive and who are not. For example, i have two homes that are right next to a graveyard. I always make sure to tell the perspecitve customer before hand. You would be surprised at how many people opt not to look at the homes.
Then story for you. I had a home inspection and to let you know I had no idea... both buyer and seller were present at the end of the inspection the seller says to the buyer so you are going to buy the place even though it is haunted! I almost croaked! Earlier I was there with just the buyers and we had had some creaking and doors slamming and we were joking about it being haunted. The buyer smiled and said yes I will buy your home and take the ghosts too.
Whew...
I run into quite a few of these types of homes in the San Antonio area. Lots of history around here with the Alamo just down the street. Makes sense there would be more activity than I saw in California.
We all have different beliefs. As a listing agent you have to abide by case precedents. In Florida stigma from deaths, suicide, crimes, HIV, murders.. are not considered material to the transaction and don't have to be disclosed. However, the questions are: if you are representing the buyer and you know your buyer is superstitious, does it make sense to hide things from them and risk alienating future business ? As a seller's agent, if the property is haunted, why not advise the seller to disclose and avoid escrow disputes and legal proceedings down the road ?
It seems to me that the mere fact of actively avoiding disclosure of a fact we know may bother other people is an indication of bad faith. I think that agents should have buyers sign an agent disclosure and hold harmless that invite the buyers to research the property history to address their beliefs.
Cheryl:
That is a great story. If I had been those buyers I would have felt the same way. I loved your comment about the floor.
It really pays to be as honest as possible and take care of the client. Obviously, they appreciate it and it worked out well for you.
Elizabeth:
Many people do not want to live near a graveyard. Myself, included. So, the buyer actually agreed to buy a haunted house? He is a brave one.
Joe:
That area must be rich in history (and ghosts...)
As a prospective buyer, it pays to talk to the neighbors!
Melissa:
I did not know that about Charleston, S.C. It must be pretty spooky around there - espectially this time of the year.
I've never heard of such a case...Now that's interesting....I guess that would fall into the "Psychologically affected" category of disclosure, huh?
My next question would be...Why didn't his agent tell him this before the offer was submitted? I would imagine his agent would've known about this house if it was so popular in the area...
Ah well, either way...I've always wondered how things would go in a case like this and now I see it's really happened. Thanks for sharing!
Chanda panda
Ben:
You are right about that. Honesty is the best policy. It will be greatly appreciated by the buyers and is much better for business in the long run. As a buyer broker, I seek out information and tell my clients everything.
I'd heard about this one, too, but loved re-hearing the tale. That judge is a riot. Thanks for sharing!
Claudette...a story for this month and the judge's opinion was a hoot. Thanks for sharing, as I enjoyed this post.
I love ghost stories but don't think I would want to sell a haunted house. Would prefer if the sellers just keep it to themselves. :)
Some people might want to buy a house with this kind of reputation. Perhaps we could put an exorcism in as one of the sales conditions?
Great post for this week. Informative.
Claudette: I love your post. My sister and I have showed two different homes where something odd happened. In the first our client told us she felt odd so my Kathy, who along with her twin brother Kevin perform "ghost hunts" (yes just like on TV) called out and asked if there was someone there they knock like she did. Kathy proceeded to knock three times and . . . something knocked back. The second time we were in an older home, Kathy had gone down to the basement with our clients and I remained upstairs. She called up to me responding to what she thought was my asking her a question. I hadn't said anything and didn't hear anything. She swears she heard my voice calling out to her.
Whether you believe in ghosts or not it makes for a great story! Carrie
Claudette..Excellent post..and well deserved feature post..: My opinion if you are aware you should disclose especially if it is documented....Very interesting post ..I am taking my mandatory continuing education: subject topic RISK MANAGEMENT...we have discussed this topic before I think i will bring this up again..I have had an associate who purchased a haunted house fully documented and disclosed...Enjoyed this Thanks
HELPFULHANNAH your friend in Philadelphia
I think that's ridiculous. She more than made the issues surrounding her house being haunted public knowledge. What was she supposed to do? Put a sign in the front yard saying 'hauntings here'?
I mean REALLY! Very entertaining post!
Claudette, interesting, entertaining and eye opening. Thanks
Boulder City Steve
Claudette, interesting, entertaining and eye opening. Thanks
Boulder City Steve
Claudette - I teach real estate licensing and intend to read this to my students! Amusing story.
REBLOGGED
I think a buyer's agent should disclose to their client if they know of anything such as this that a buyer might want to know.
That's a neat story, Claudette! I love ghost stories, and it's almost incredible that one such as this would go to court-I've never heard of a ghost story where the courts got involved. It makes me curious to do some research on it. Thanks!
Look at all the excitement I am missing out on by not being an agent. Darn it! Thanks Claudette!
Claudette,
So... did the house ever sell? Great info..... thanks for sharing!
Kathy Opatka
Mary:
Thanks for stopping by.
Rebecca:
I agree. I got a kick out of the judge's wit as well.
Marian:
Really? That could come back to bite you when the buyers discover it...
Gene:
We would have to get an attorney who specializes in spooky sales.
Nicholas:
'Glad you liked it.
Carrie:
That is really something. It sounds as though you are in the "Ghost Busters" business. Thanks for that!
Claudette - there is a haunted mansion around here for sale. It is famous and eventhough we too have a clause about stigmatized property I can't see how anybody wanting to purchase it wouldn't know it's haunted or at least supposedly so. We showed it to buyers who were interested and knew it. The decided not to go for it though. ~Rita
Hi, Hannah:
Really? A haunted house, fully-disclosed? I would love to see that MLS listing. Thanks so much for that.
Christianne:
Apparently, the buyer was not from the area and claimed to not know anything about all of the publicity. I know, it's a bit odd.
Steve:
Thank you.
Erica:
That is a wonderful idea. They will probably enjoy it. You must be a great teacher.
Damon:
I totally agree. I would be the first to tell them if were my client. But, unfortunately, I don't think this many was working with a buyer agent.
Amy:
Look it up. It actually gets more interesting. The fact that the court made a ruling that the house was haunted is quite amazing in itself.
Julie:
I am sure that you have plenty of excitement - just not in haunted houses. Thanks...
Kathy:
Yes, the house did sell and I think she did okay on the sale after all of the publicity. Some people gravitate to houses with notoriety. (Even O. J. Simpson's home did alright.)
Rita:
I agree. If it is famous, people will probably know that it is haunted. I hope you were not too spooked during your showing.
That was intersting and entertaining. Loved the judge's sense of humor. A great piece to re-blog for Halloween. Thanks!
Chrtystina:
I am glad you enjoyed it. It is totally dedicated to Halloween week.
We have a historic district in our town and there are all kinds of tales about the different homes. Some call it haunted some call it history.
I don't necessarily agree with the "if in doubt, disclose" theory for stigmatized properties. The laws certainly do vary from state to state, but my feeling is that the seller could sue the Realtor for interfering with the sale of the home if this is not a mandatory disclosure in the particular jurisdiction.
Allen:
There may be a fine line between haunted and history. I think all older dwellings have some mark of personality from a different time that has been left on them.
Martin:
That is actually a good point. A Realtor is not obligated in many states to disclose information about alleged paranormal activities in a home. So, I can see where a seller could object to it. I think you would have to have that conversation with the home owner and determine what his wishes are if you agree to be take on a fiduciary responsibility. A buyer broker is another matter entirely...
Thanks for the story...reminded me of an office I worked in that was inhabited by several ghosts. Most were friendly, but one was evil. The office was in an old Victorian style home of one of my very best friends. Things were always moving for no reason, you could smell perfume scents that were sometimes overwhelming. Cold drafts were commonplace. The biggest scare I had, was one afternoon I had agreed to do some laundry for my friend. Her laundry was in the cellar (Michigan basement). The door had a skeleton key lock. I went downstairs & started a load. I heard the door slam. I went upstairs opened the door, then promptly closed & locked it with the key in it. Five minutes later the door opened by itself. I closed it again & locked it. You guessed it, it opened again. But this time I felt a cold draft & heard a wicked laugh. I decided to go home for the day. There were tons of other happenings there, so much so that my friend & her husband ended up on a TV show one year for an interview right around Halloween.
Cynthia:
I was on pins and needles reading that. You should write a post (or short story) about it. That is truly amazing. I would have gone home too, immediately following that laugh, if not sooner.
Great Post... Reminds me of the last time I stayed at The Deerfield Inn... or Grandma's house right around the corner. (Built in 1792)
Great places to dress up as Pilgrims and Indians for Halloween... ;)
Paul:
A house built in 1792... That's an old house.
Great post, very entertaining and interesting. I love the judges response, I was amused even if they were not. :)
It's been updated a couple of times... LOL!! (I'm sure the title report is much more interesting to read then the ones I see here.)
So much history in the area since it was the area between the early settlers and the Indians. Thanksgiving eventually led to the:
Bloody Brook Massacre
which was part of
King Phillips War
Some great settings for haunted homes built on sites of massacres...
I was just up there this past July... it's interesting how quiet the area is after 9:00 P.M.
Happy Halloween... ;)
Great story and very topical. You had me until you said there was a judge with a sense of humor!
Sometimes the judges' opinions are entertaining though having read many, I can tell you that's not always the case. This was a timely and entertaining post.
GOOD MORNING CLAUDETTE! Congrats on the feature -- this is one of the most unique posts I've read! I like the humor of the judge too!-- Gabrielle
Diane:
I am glad you enjoyed it.
Paul:
That house must be an on-going project, and it must be a very special place.
It sounds like you have a lot of history in your area. There is plenty of material there to write a Thanksgiving post. Very interesting...
Wayne:
Thank you for that. I am glad you liked the story.
Christine:
You must have your own stories from all of the opinions you have read. There are probably some fascinating ones.
Gabrielle:
Good morning to you and thanks very much.
Very Interesting Case
Wendy:
Thanks for stopping by.
I especially love the part in the case that says the seller wouldn't be leaving the house 'vacant' if there were poltergeists in it! That whole case was a good read, and very funny!
Amy:
I am glad you enjoyed the story.
Cute story and great timing this week! Each state is different regarding these matters and so let the buyer beware.
Lyn:
You are right. Disclosure laws vary from state to state.
Here in California my attorney said he thought a buyer would have a very difficult time proving a home was haunted. But if the sellers told the neighbors and I that a house is haunted it's probably best to send a email to my client stating what the seller said just for CYA purposes.
In a highly publicized haunted house like Claudette is blogging about, I think the best thing to do is promote it as "Haunted House For Sale". It would attract the buyers who will laught and don't believe it and it will attract the haunted house lovers.
Linda:
I would go with that attorney's advice. It is always better to cover yourself.
Actually, some people are attracted to homes like this. They are braver than I.
Sorry I missed this post. It looks like great minds think alike. I find this case so interesting... and it is nice to know that judges have a a good sense of humor!
Joan:
No problem. I think it is a great story and worth retelling and your post was excellent. Have a great Halloween.
Great post.
That story is a favorite of mine and I mention it when I talk about stigmatized property... because I just love that the judge wrote 'who you gonna call' and talks about 'poltergeist inspectors.'
My answer is Call Me.
Ghost are just one of the things I can clear from houses and since I work remotely I can do this anywhere you have a problem. See my site www.HouseHealing.com... find the Realtor page.
Everything all of you described are pretty commont ghost phenomena. What most people don't know is that ghosts can be helped to understand their situation and 'cross over.' That is the win-win. There is no reason to live with them OR to have a property that languishes on the market or sells low. Actually, any house that behaves that way in the market has something unseen that people are responding to.
Happy All Hallows Eve
David
David:
I just spent some time at the website you sent to me and also some of the other sites that you are mentioned on. You are a "professional house healer and ghost rescuer." This is something that I was totally unaware of as a profession (apart from the fictional "Ghost Busters.")
It looks as though you have been doing this for some time and you operate out of Amherst, Massachusetts. It is totally appropriate that you commented on this blog post and, more importantly, on Halloween.
I also see that you have just gotten started Active Rain. I wish you the best in your endeavors.