Your Val Vista Lakes Home for Sale has Ghosts? Disclose that Material Fact

Your Val Vista Lakes Home for Sale has Ghosts? Disclose that Material Fact

Kristine Ginsberg posted this great blog:

 http://activerain.com/blogsview/2729869/did-you-just-say-there-s-a-ghost-living-in-your-house-

which prompted many comments, and unfortunately many of the comments were giving wrong advice. Many of the commenters made statements saying that ghosts were not required to be disclosed in their state, and one of those states was Arizona where I am licensed.

Kristine’s blog discusses a Seller informing her Realtor that she had a “friendly” ghost. The Seller said: “He’s harmless. He only moves things around, shuts off lights and turns the pictures off center, but he’s never done anything bad. He just lets me know he’s here.”

The Realtor didn’t want to hear this so she told the seller: “keep that to yourself if you want to sell your house and trust me, plenty of people don’t want to live in a home where someone took their own life and is now “rumored” to be a ghost!”

The Realtor was giving wrong advice. Her statement admits that the presence of a “ghost” is a "material fact" which will affect a Buyers decision. She also made the probable mistaken assumption that a person took their own life in that home. She has no way of knowing where the ghost died, nor how it died.

Let’s fast forward, and assume the Seller heeded the Realtor’s advice and did not disclose that there was a ghost in the house.

Mr. and Mrs. Buyer loved the home and bought it for full listed price. After moving into the home, the Buyers were told about the “ghost” by the neighbors. The Buyers were frantic; they did not want to live in a house with a ghost. So what is their natural course of action? File a law suit against the Seller, the Realtor, and the Realtors Brokerage firm for failure to disclose a “material fact” that would have affected their decision to buy or not buy that house." The result would most likely be that the Buyers would win the case.

Why was that Realtor, and the Realtors responding to Kristine’s blog making the error of not disclosing?

Some say there is no requirement to disclose a ghost. Well, as hard as I search, I cannot find anything in the Arizona disclosure law, nor the Sellers Property Disclosure Statement, that states that “ghosts” are not required to be disclosed. So, what leads people to the assumption that a ghost need not be disclosed?

In Arizona, it does state that a death on the property does not have to be disclosed. Therefore, I believe what is happening is, the Realtors are assuming that the ghost died in the home, and since a death is not required to be disclosed, they deduce that a ghost need not be disclosed.

The problem with that deduction is twofold:

• The alleged “ghost” may not have died on that property. Perhaps there was never a death in that home. Therefore this ghost cannot be attached to the “no requirement to disclose a death in the home”. This is an alleged ghost who has apparently risen from the grave and is currently active in that home. It's a completely different issue from a death in the home.
  

• The ghost is “active” in the home. Whether or not we believe in ghosts, it is apparent from the Seller's statement that this ghost is reaching out from the grave and calling attention to itself for some reason. In Kristine’s blog, the ghost is very active. It moves things around, shuts off lights, and puts pictures off center, in order to let the Seller know it is there.
  

Now let’s examine a portion of the Arizona Sellers Property Disclosure Statement form, instructions on the first page:

Item (6) Other Conditions and Factors: “These blank lines provide space for you to disclose any other important information concerning the property that might affect the buyer’s decision-making process, the value of the property, or its use, and to make any other necessary explanations.”

This is an all encompassing statement. It very clearly states “any other important information concerning the property that might affect the buyer’s decision-making process”. Wouldn't it be logical to assume that an active ghost in the home would be an important piece of information concerning the property that a Buyer would want to know before making a buying decision?

Remember this ghost may not have died anywhere near this property. And at least in the mind of the Seller the ghost is very real.

• We know that many buyers will be freaked out in a house with alleged or real ghosts.
• Others may seek out a home with ghosts.
  
• In either case, the presence of an alleged ghost is “important information concerning the property that might affect the buyer’s decision-making process.”

Are you still one of the believers that a “ghost” does not have to be disclosed? Well keep reading…..

There is a famous case in New York (Stambovsky v. Ackley, 169 A.D.2d 254 (NY App. Div. 1991)) This case is discussed with attorneys in law school, and any time a case of non-disclosure of ghosts comes up, the attorneys will look to this citation. 

In this famous case, the Seller had  reported the house being haunted in national publications, and in local news; and the home was featured on a local ghost tour.

The Seller did not disclose this to the Buyer.

In 1990, she sold the home for $650,000 to a buyer from New York City who had not heard about the house being haunted. When he learned it was haunted he canceled the sale and sued to get his $32,000 down payment back.

The Court found that whether or not the house was haunted was not the issue, since even the reputation that a house was haunted may affect its value. The Court found that the law at the time did not require the seller to disclose the haunting on the theory of “buyer beware,” which places the burden on the buyer to inspect the property to ascertain the condition of the property they are purchasing. However, the court found that a normal inspection would not uncover the ghosts that allegedly haunted the home. Consequently, the buyer won the case.

The Holding and Rule of the case was: If a seller knows of a condition that is unlikely to be discovered by a careful and prudent buyer, and impairs the value of the contract, nondisclosure of this condition represents a basis for recission under equity.

• Remember, this is not about a death on the property.
  
• This is about the existence on the property of a poltergeist.  

It was my opinion in the beginning that a “ghost” could not be tied to the non-requirement to disclose a death on the property. That’s because the ghost may not have died on the property, and at this time the ghost is allegedly being active in the home and making its presence known by its actions. However, to be certain, I felt it best to consult with a real estate attorney on the matter.

The attorney I consulted with on this question provided the case citation, and said that an alleged ghost must be disclosed. He further said that, no matter how bizarre this may sound, if the seller has experienced aliens from other planets attempting to kidnap him/her from the home, but not at any other place, then that is a material fact which must also be disclosed.

If the above information is not sufficient to convince those who think ghosts (or aliens) should not be disclosed, then I would advise them to consult with an attorney

If you are a home seller in Val Vista Lakes, Gilbert, Phoenix, or any other city in Arizona, and you have a ghost in your home, then be sure to disclose that material fact.

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