It's nearly Halloween, and some people are searching for an entertaining haunted house, but . . . would you want to buy one? No, we don't have one for sale, but we have been collecting some stories about what can happen when you want to buy - or sell - a house where someone has died.
Local Realtor Shiva Jafarzadeh has some experience in this area. If selling real estate is a science, selling homes where someone has died is an art, one that includes science and law. In the state of California, there are mandatory disclosures that must be made by a house vendor to the potential purchaser. For example, if someone has died in a house within three years, it must be disclosed, and by "in a house" we mean literally in the house, not just while living there, and the somebody means anybody, whether owner, visitor, repair person, even trespassers.
That's the basic legal requirement, but the art of real estate means that seventh sense a good real estate agent possesses understands that a potential purchaser might not be okay with a home where a death occurred, even if it was outside the legally required disclosure period. And that art extends to a sensitivity about the kind of death: was it the natural death of a person who had lived a long, full life? The death of a child? Or, so much worse, did a violent death occur in the property?
Let's assume that you want to sell a house where a death occurred more than three years ago. So you don't have to disclose, right? Legally, that might be true. But, trust us, you want to disclose. If you don't, do you know who will? Your neighbors. Remember, if the potential buyer comes out and asks about a death specifically, even longer than three years ago, the law requires you to disclose what you know.
Some houses may be considered "stigmatized," and subject to more stringent requirements. In a landmark case on stigmatized houses, the California Court of Appeals found that a "seller of real property has a duty to disclose: 'where the seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to him and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer . . . '"Reed v. King 145 Cal. App. 3d 261, 193 Cal. Rptr. 130 (Cal. Ct. App. 1983).
Are you ready for the scary stories? OK, we've got em! Here's one: Purchasers move into the home they've just bought. After a little while, they call their Realtor and ask, we know that no death in this house was disclosed, but are you sure? Because, they say, we hear noises in the garage at night, and we are convinced that it is a ghost. This case went to court. It turned out that a young man had committed suicide in the garage over 25 years earlier. His father discovered him in the morning, in the car with the motor running. But, was the garage haunted? Nope. The new owners heard the story from a neighbor and, being superstitious, they were looking for a way out of the deal. When all was revealed, they lost that case.
On the other hand, there actually is a niche market for haunted houses. So, while some people may eschew a house where a death has occurred, others are actively seeking a real haunted house, and might be willing to pay a premium for actual or suspected ghosts. On the other hand, a death in the house also makes a home a target for bargain hunters. Investment purchasers are not sentimental, and will try to snap up a hard-to-sell property cheaply and rent it for a few years, then sell it after the disclosure period has passed.
And disclosure is not the only legal hurdle you may face. Jafarzadeh tells a story of a couple who found a beautiful, vacant house in an East Bay neighborhood. The house appeared to be totally remodeled and was vacant, but there were many personal belongings
deposited in the backyard. There was a For Sale sign in front of the house. The price that the selling agent quoted was low. Shortly after their initial inquiry, the purchasers received a telephone call from a man who said he had inherited the house from his mother, but that the paperwork was not completed. The purchasers entered into a rent-to-buy agreement, sold their home and moved in.
Six months later, the "vendor" disappeared, and the purchasers, unable to find him, ceased making payments. Then they received a letter from an attorney. It turned out that the vendor had actually not inherited the house from his mother. He was one of seven siblings. His mother had died in a house fire at the property. The other siblings had not been notified of her death, but the purported vendor had used the insurance money to repair and remodel the house and place it on the market. The matter went to the probate court, where the rent-to-buy agreement was upheld for the purchaser, who bought the house, but that wasn't the end of their trouble. For example, on one occasion the vendor's sister showed up in the middle of the night with a shovel, removing the landscaping from the front yard, and that was not the last of her visits, which were never friendly and she was sometimes under the influence.
The takeaway? If you are the vendor, disclose everything! If you are a purchaser, make sure you ask outright about the things that are significant to you, including whether or not there has been a death or violent crime in the property. If all goes well, you might just find the haunted house of your dreams.
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Lamorinda Weekly, Moraga CA