The Supreme Court of New York State voted 3 to 2 in favour of the buyers giving them a release of their deposit and damages. What was surprising about this case is it set a precedent in the 1990s that there are haunted homes and the homeowner is responsible for disclosing the stigma associated with a home with a real or imagined haunting.
The case began in Nyack, New York State. An out-of-town purchaser arrived looking for a new home and fell in love with what appeared to be a lovely older home that was styled similarly to the home of television's Munster Family. The homebuyer made an offer that was accepted.
Unfortunately, it wasn’t until the new owner engaged an architect that it became apparent that the previous owner had heavily promoted the property as haunted as part of their Bed & Breakfast business. It was decorated as a haunted house at Halloween and strange occurrences had been reported over the years.
After finding out about these occurrences, the buyers had second thoughts about the purchase of the home. They requested to be released from the sale of the property. The seller denied the release from the sale and that is how it all ended up in court.
This is a great example of how a home can be stigmatized, affecting its value. This issue could have been prevented had the homeowner disclosed that home was known as a haunted home to the out-of-town buyer. This should have been documented in writing and then been included in the Agreement to Purchase the home.
Another problem arises here, as the agents representing the buyer and the seller should be local experts in the real estate market. Both failed to disclose the stigma attached to the home, whether it was real or imagined. The agent or agents representing the buyers are potentially liable for damages that are a result of failure to disclose important facts about the home.
As professionals, the agents should have limited the liability of the homeowner as well as to themselves by having a properly completed property disclosure form. Secondly, as most disclosure forms do not deal with paranormal phenomena, the agents should have written a letter stating the advertising for the Bed & Breakfast business promoted an image that implied paranormal activity at the home regardless of whether the haunting was real or imagined.
So next time your looking to buy that perfect home, remember to ask about the ghosts you'll be living with, too.
