BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Broker Risk Management (“BRM”) has received a number of inquiries regarding whether a seller and/or agent are required to disclose the existence of a ghost or a “ghostly presence” in a home. The simple answer is “yes.”
Interestingly, Massachusetts has a statute requiring the disclosure of ghosts and related presence. It is speculated that the statute dates back to the witch trials and people observing ghostly figures in homes after those deaths. However, the existence of the statute reiterates the importance of disclosing such existence. Consider the following scenarios:
SCENARIO NO. 1: I am a listing agent. The seller disclosed that her son had committed suicide in the garage 11 years before. She also advised the agent that she occasionally hears a male voice coming from the garage stating, “Help me.” How do I guide the seller regarding these disclosures?
RESPONSE: Advise the seller that the seller should disclose the death of her son, and in a very factual manner disclose what she has heard or observed coming from the garage.
FURTHER QUESTION REGARDING SCENARIO NO. 1: There is a California statute stating that a seller does not have to disclose a death occurring on the property more than three prior to the date the buyer offers to purchase or rent the property. However, I have advised the seller to disclose the death even if it occurred more than 3 years prior. Does she have to disclose the death?
RESPONSE: It is recommended that she disclose the death. There is a conflict in the law. On the one hand, the law states that a death occurring on the property more than three years prior to the buyer’s offer to purchase does not have to be disclosed. On the other hand, the law is clear that all material facts affecting the value or desirability of the property need to be disclosed. For many people, a death on the property is a material fact. In some cultures, a buyer will not purchase a home if there has been a death at the home, even if the death was of natural causes. If the death was by violent means, whether suicide or a crime involved, the importance of disclosing it is escalated. Crimes occurring at a property can stigmatize that property, which means it could affect the value or desirability of the property.
SCENARIO NO. 2: I am a listing agent. I was at the house and heard voices in the back of the house. I investigated, but no one was there. A colleague in my office also held the home open and reported the same experience. We are both convinced that there is a ghost in the home. We understand from a neighbor that there was a previous death at or near the property. Do we need to disclose our observations?
RESPONSE: Yes. The observations should be disclosed on your Agent Visual Inspection Disclosure in a very objective manner without conclusions or descriptions. Disclose that, while being in the home, you and a colleague heard unexplained voices in the back of the home. Do not draw conclusions.
PRACTICE TIPS:
- If you learn that a death occurred at the property, you should consult with your manager about ensuring it is properly disclosed.
- If a death occurred at the property and the seller does not want to disclose it, citing to the three-year statute, discuss the issue with your manager. You should also refer the seller to an attorney. Even if the seller declines to disclose that fact, if you have knowledge of it, you should independently disclose it on your AVID.
- If you have an awareness of ghosts or ghostly presence at the property, it must be disclosed as this would be considered a material fact affecting the value or desirability of the property.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is an attorney-client privileged communication for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management LLP. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry but rather are intended to suggest good risk management practice.