“Get out!”—disembodied demonic voice warning a Roman
Catholic priest who was deployed to bless a home recently purchased by the Lutz
family, 112 Ocean Avenue, Amityville, NY, January 1976
In the popular
new Netflix series “The Haunting of Hill House,” the Crain family moves in with
the hopes of “flipping” the aggressively-Gothic mansion and using the proceeds
to build their “forever home.” Instead, they find themselves terrorized by a
menagerie of malicious resident spirits.
In the
first episode, we see the father fleeing the house with his five children,
abandoning the project, and telling his incredulous lawyer: “I want the gates
and the doors kept locked at all times, and I want to know every day that it’s
empty…. It sits there and rots.” Thus, the flip became a flop.
Mr.
Crain is saying, of course, that he cannot in good conscience sell the home to
another family. He doesn’t want anyone else to suffer the horrors that drove
his ill-fated family from the house.
The real-life Lutz
family of “The Amityville Horror” fame had no such reservations. They unloaded
their Dutch colonial on Long Island onto Jim and Barbara Cromarty in March 1977
for $55,000.
The Cromartys
reported no problems with the home and remained happy with the deal that they
had made.
But what if it hadn’t
happened that way? When you’re selling a house, are you required to disclose
the very bad things that happened there—paranormal or not? Has a buyer who
unknowingly purchases a haunted house got any recourse?
The duty to disclose
Sellers of real
property are required to disclose to prospective buyers any physical conditions
to that may affect the value of the property. Most states require this disclosure
to be made in writing. Further, most state laws prohibit the seller from
intentionally concealing major defects.
Hauntings are not
physical defects, however. Indeed, ghosts, spirits, specters, demons, apparitions,
poltergeists, haints, shades, spooks, and wraiths are the opposite of physical,
because by definition, they lack a physical form.
You can’t prove a
negative, of course, especially not a negative that is inchoate. The overwhelming
consensus of science, then, is that ghosts don’t exist. But this hasn’t stopped
courts from declaring properties “haunted.”
Haunted as a matter of law
In 1989, Wall Street
bond trader Jeffrey Stambovsky contracted to buy a Nyack, New York, Victorian for
$650,000 from Helen Ackley. As the parties were preparing to close on the
house, remodeling contractors told Stambovsky that the house was haunted,
visited by poltergeists and benign apparitions dressed in Revolutionary War-era
garb.
Stambovsky, who did
not believe in ghosts, sued Ackley to get out of the contract, alleging that
Ackley had failed to disclose that the home had received national press
attention for the hauntings. The court held that, because Ackley had placed the
home on ghost tours and had been interviewed as a haunted house owner in
publications such as “Reader’s Digest,” she was estopped from saying that the
house was not haunted. The court ruled that the house was therefore haunted as
a matter of law. The court reasoned that this undisclosed condition (namely,
the unwelcome attention and stigma) negatively affected the value of the home
and let Stambovsky out of the contract. Stambovsky v. Ackley, 572 N.Y.S.
2d 672 (N.Y. App. Div. 1991).
Stigmatized property
While Stambovsky
successfully proved that the stigma of the haunting adversely affected the
value of the home, the presence of spirits is not required. A property can be
stigmatized by horrific events of the type that lead to ghostly activity, at
least in popular culture.
The house in the
Amityville Horror lore was one such house. While the paranormal events described
by George and Kathy Lutz have been debunked, there is no question that the
house was the site of another type of horror.
On November 13, 1974,
Ronald DeFeo, Jr., shot and killed six family members at the house that the
Lutz family later inhabited. DeFeo was found guilty of murdering his mother,
father, two sisters, and two brothers and was sentenced to six consecutive life
sentences in New York’s Green Haven prison, where he remains today.
When sellers fail to
disclose that a gruesome death such as the one at Amityville occurred in the
home, courts in different jurisdictions have come to opposite conclusions.
In Reed v. King
(145 Cal. App. 3d 261 (Cal. App. 3d Dist. 1983), the court held that Dorris
Reed should be let out of his contract with Robert King, because King failed to
disclose that a mother and her four children were murdered in the house ten
years prior.
Conversely, in two
Pennsylvania cases, courts held that a murder-suicide and a suicide in the
master bedroom did not materially affect the buyers’ enjoyment and use of the
homes and refused to rescind the contracts. Milliken v. Jacono, 103 A.3d
806 (Pa. 2014) and Bukoskey v. Palumbo, 1 Pa. D & C 456, 463 (Pa.
C.P. 2007), respectively.
Built on an ancient burial ground
In the 1982 movie “Poltergeist,”
the spectral activity occurs because the house was built on top of a cemetery (a
regular cemetery, not a tribal burial ground as most people incorrectly remember).
Today, we could offer
at least some small comfort to offer the bedeviled Freeling family. Courts have
held that sellers who fail to disclose that the property contains a cemetery,
particularly if human remains were disturbed when the house was built, are
liable to the buyers because the presence of the cemetery is a material defect.
Rhee v. Highland Development Corp., 182 Md. App. 516, 543 (2008).
Indeed, the presence
of human remains can be a land use problem. All states have strict laws on what
can be built on burial grounds. I recently advised on a Tennessee case in which
a family asked a homeowner if they could bury their mother’s cremated remains
in an urn on the family property where she had grown up. The homeowner, who was
not related to the family of the deceased woman, asked whether this was a good
idea. It’s not. The moment you bury human remains, you form a cemetery in the
eyes of the law. Now, you may not disturb the land around the grave and you
must disclose the location of the cemetery to all prospective buyers, who are
then bound by the same restrictions. I advised the homeowner to offer to let
the family scatter the ashes instead, and they agreed.
The law sides with
the poltergeists on this one. Do not disturb human remains, no matter the
capital gains.
Laying the matter to rest
It’s clear from this
analysis that the courts haven’t taken a position on whether ghosts are real.
Instead, they have ruled on whether there is a stigma that may give future
buyers a negative opinion of the property and may therefore decrease the
property’s value.
It’s scary enough to
buy or sell a house, so it’s important for the buyer to be aware and the seller
to disclose all defects as required state law, including case law.
Happy Halloween!
Special thanks to my colleague John Murray, who pointed
me in the right direction of stigmatized properties when I could not remember
the term and who wrote a much more extensive law review article on similar
undisclosed defects in the sale of stigmatized real property. I was able to use
his original research and add my own. Read his article here:
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