Would you move forward with buying your dream home if you were informed a murder had taken place there? What about if the property is haunted? Understandably, many people would not.
Although long gone are the days of “caveat emptor,” meaning “let the buyer beware,” according to the New York Real Property Law §443-a, which details the disclosure obligations for Real Estate Brokers and Real Estate Salesmen, if a “property is, or is suspected to have been, the site of a homicide, suicide or other death by accidental or natural causes” a seller is not obligated to disclose these facts to a buyer because “it is not a material defect or fact relating to property offered for sale or lease.”
In other words, the only disclosure necessary is that which pertains to the physical condition of the home, such as whether the home is located on a wetland, if there has been water damage if there is asbestos in the structure, etc., which is required by New York Property Law §462.
Accordingly, because a death on location is not considered to be a physical defect of the property, there is no legal remedy for a buyer if he/she becomes aware of these circumstances after purchase. New York Real Property Law §443-a, in addition, protects sellers of real property and their agents against causes of action, or lawsuits, pertaining to the non-disclosure of deaths on the premises.
The only protection a buyer has is that a buyer may, during negotiations, submit a written request to the seller or seller’s agent for information relating to any deaths at the property; nonetheless, the seller is not obligated to reply and “may choose whether or not to respond to the inquiry.”
As the presence of ghosts and spirits would not be deemed as pertaining to the physical condition of the home, it would seem this disclosure is not required either. As the New York Real Property Law does not specifically reference hauntings, this was an issue that famously made its way to the New York State Supreme Court, Appellate Division, in 1991.
In what is commonly known as the “Ghostbusters ruling” (Stambovsky v. Ackley, 169 A.D.2d 254, 572 N.Y.S.2d 672) Jeffrey Stambovsky, buyer, brought an action against Helen Ackley, seller, due to his inability to resell, and the depreciation in value of, a supposed haunted property, because Ackley had fervently informed local and national media and perpetuated rumors that paranormal activity that had taken place in the home.
The action was initially dismissed by the New York State Supreme Court, but Stambovsky thereafter appealed the decision. The Appellate Division held that Ackley could not deny the existence of “poltergeists” on the premises and that the “house was haunted as a matter of law” because she had nationally publicized the house as being haunted and therefore, “had a duty to inform the purchaser” as well.
Although the nondisclosure itself was not deemed to be fraudulent and the seller’s agent was not held accountable for the nondisclosure, Stambovsky was entitled to “rescind [the] contract for sale and recover [the] down payment upon discovery of home’s reputation as being haunted.”
That is to say, a seller does not have to disclose the presence of ghosts and spirits, or poltergeist activity unless he/she has personally sought to make a reputation of the premises for being possessed.