Exploring a New Jersey Seller’s Duty to Disclose the House You’re Buying Is Haunted.
Put yourself in these shoes: You just closed on the purchase of your new home, and boy, were you thorough:
You did a home inspection. You did a title search. You ordered a survey. You called the municipality and verified that there are no nearby toxic waste dumps. You visited Megan’s List and confirmed there are no known predators living in the neighborhood. You even visited the neighborhood at 10 p.m. on a Saturday night just to see how quiet the street was. Everything checked out nicely.
You were quite the negotiator to get such a great house at such a low price, you believed, until your new neighbor drops by with some fresh baked cookies and mentions some unspeakably disturbing horrors that took place in your house years ago. Rumor has it that the house is still occupied by vengeful ghosts.
“Oh, you didn’t know?"
A 1970s photo of the home of the murdered DeFeo family in Amityville, NY
Yikes. That explains why you were able to negotiate such a terrific price on the house. You purchased a “stigmatized property." This is property psychologically impacted by an event which occurred or was suspected to have occurred on the property, such event being one that has no physical impact of any kind. What, then, does New Jersey law require by way of seller’s disclosure of a stigmatized property? New Jersey case law is silent on the issue of disclosing stigmatized property.
Generally, a disclosure of an issue must be made by a seller where a reasonable person would attach importance to its existence or nonexistence in determining whether to purchase the property or if the seller knows or should know that the buyer regards or is likely to regard the issue as important in determining whether to purchase the property.
In light of this, I would suggest that a New Jersey seller should be obligated by law to disclose stigmatized property. Yet, some jurisdictions, such as Massachusetts, have taken the opposite view. The New Jersey law is simply unclear.
So how are we to best protect ourselves from this uncertainty? Sellers would be wise to disclose any known notorious event that has taken place in the house. Does that mean you have to disclose that someone passed away of natural causes in the master bedroom 10 years ago? No. Does it mean that you should disclose the triple homicide that took place in the house last year which became the subject of horror movie? Disclose it.
As a buyer, you need to ask questions. While the law is uncertain as to whether a seller needs to disclose stigmatized property, what is clear is that sellers may not make misrepresentations. If you ask the questions, you are legally entitled to truthful answers. Remember this before you unwittingly purchase a stigmatized property.