Before you sell that haunted house, you'd better consult a lawyer

So, you're looking to buy this charming old house, and the realtor whispers something to you about murders and spirits and unspeakable tragedy. Next thing you know, blood is running from the walls. It's a common element in the haunted house story, but what about reality?

How do hauntings and other assorted grimness figure into actual spooky real estate dealings?

If your haunted house is going on the market, or you're considering purchasing one of those charming but shady mansions down the street, certain information may or may not need to be shared. In fact, depending on what state you're in, you might be required by law to live out that whole "So you know about the murders ... " scene for yourself.

Blogger Matt Soniak explains how real estate law figures into the strange business of buying and selling homes that come with more than four beds and two baths.

Most U.S. states require sellers to fill out a standard form disclosing what they know about the property's condition and list any potential physical defects. This is a relatively recent reverse of the older "buyer beware" norm in real estate and lets buyers know ahead of time of any major problems with their dream home.

There are other defects besides faulty wiring and sinking foundations, though. Some states go a step further and require sellers to also disclose "emotional defects" that could impact and stigmatize a property. This includes traumatic events like murders and suicides, reported paranormal activity and even proximity to homeless shelters.

Whether you have to disclose anything and what types of defects you have to disclose all depends on the jurisdiction. If a seller does have to disclose emotional defects, which ones and how much detail they need to go into again varies among locations.

In Massachusetts, for example, the possibility of a property being "psychologically impacted" isn't considered a "material fact required to be disclosed" to potential buyers. In Virginia, emotional defects like murders and ghost sightings only have to be disclosed if they physically affect the property (Blood running from the walls? Gotta tell the buyer). In California, as American Horror Story demonstrates, sellers do have to disclose emotional defects, but only in a very limited way. The state Civil Code requires that a death on the property only needs to be disclosed if it occurred less than three years prior to the sale and older incidents need to be addressed only if the buyer specifically asks. Some jurisdictions are a little more vague in the way they word things, so smart sellers could potentially disclose what they need to without having to drop words like "haunted," "poltergeist" or "murder spree."

If it seems odd that states have had to establish laws like this in the first place, it shouldn't. We have so many fictional tales of murder and mayhem turning into real estate nightmares that a few real ones were bound to turn up, like the infamous case of Stambovsky v. Ackley.

In this particular case, Helen Ackley was the proud owner a big old Victorian mansion in Nyack, N.Y., and seemed extra proud that the place was filled with ghosts. She was so proud, in fact, that she described her paranormal pals—including some in colonial clothing and another who approved her new paint job—to the local newspaper and Reader's Digest, and even put the home on a ghost tour.

Then it came time to sell it, and suddenly she wasn't so happy to bring up the home's haunted history. The Stambovskys, a couple from out of town, purchased the home for $650,000, doled out a downpayment of $32,500, and then lived that dreaded "You don't know about the ghosts?" scene with a local. They weren't happy to hear this, felt they'd been cheated, and took Ms. Ackley to court.

They lost the case, with the court citing their caveat emptor ("let the buyer beware") responsibility to uncover the property's defects before committing to a sale. They appealed and the Appellate Division of State Supreme Court ruled in their favor in a 3-2 decision.

Even if you don't actually believe in ghosts or haunted houses, the presence of such a stigma on a house is enough to affect its value, whether positively or negatively. Since Ms. Ackley had spent all that time fostering the belief that her house was haunted, but then failed to reveal this to the conveniently non-local buyers, she was at fault. One of the judges in the case noted that home buyers can't be expected to go to every house they look at with a psychic ready to inspect the joint for phenomena, so obviously the seller has some degree of responsibility here.

So, if you're into haunted real estate, be sure to talk to a lawyer before you make any deals.

(Via Mental Floss)

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