Most real estate professionals know the ins and outs of disclosing physical damage or immediate hazards about a home to potential buyers. Whether it’s faulty wiring in the basement, or mold damage due to moisture, there’s a disclosure form for that. But what about issues with the property that aren’t so apparent — more psychological, stigmatized… or even haunted?
A stigmatized property is any building that has a detrimental issue that is not related to the physical condition of the house. This could include a sordid history — say, a murder or suicide on the premises — or even a belief that the house has a supernatural visitor. In Georgia, the Stigmatized Property Act states that agents are not required to disclose any of these events if they occurred on the property. “The law says absolutely nothing about the property being haunted, and to my knowledge there are no cases in Georgia where someone ever sued someone else with an allegation that the house was haunted,” said Seth Weissman, general counsel to the Georgia Realtors and founding partner of Weissman Attorneys at Law. “With regards to things like a murder or suicide, or someone dying some kind of gruesome death, we actually have a specific state statute directly on point. And the state statute was written frankly to protect realtors.” If an agent is asked about a specific event or stigma on the house, the agent is required to disclose honestly.
Brokers in Georgia should count their blessings, as several other states throughout the country are much more specific about their disclosure laws. In California, anything that could affect the material value of a home must be disclosed. That includes death and property that is stigmatized, such as a property that is known to have a haunting past. “Anything that affects, or could potentially affect, the material value of the property needs to be disclosed,” said Cindi Hagley, owner of the Hagley Group in Pleasanton, California. “If there’s been a death on the property in the last three years, that must be disclosed. Manner of death doesn’t need to be disclosed, but if we’re asked about it as licensed [real estate professionals], we want to disclose that if they ask about it…”
California’s departure from disclosure law might be best seen in the context of the state’s laser focus on consumer protection. Hagley noted that while disclosure laws like Georgia’s tend to benefit the listing agent and seller, increased disclosures such as those in her home state clearly benefit buyers and their representatives
Hagley, who’s known throughout California as the stigmatized home specialist, noted that it’s not just about ghostly visitors. “Stigmatized homes could be a meth lab,” she said, noting that haunted houses are relatively rare. As a consultant for many agencies around the country, she always recommends that agents disclose as much as possible, even if the state doesn’t require it. “If there was a mass murder on a piece of property and a buyer who was looking from out of state doesn’t know this, I think the buyer should know that that happened,” she said, noting that the buyer could have a case for a lawsuit.
Weissman recalls a few instances where sellers were not honest with their clients about a murder on the property when directly asked. He warns that even if you don’t tell, the neighbors will. “This is not a subject where you want to lie about,” he said. “One, because it’s fraud. But two: The first thing that’s going to happen if you lie about it is the buyer is going to move in and the neighbors are going to welcome them to the neighborhood and say, ‘Gosh, I’m surprised you bought … a triple murder occurred there last year.’”
The Georgia disclosure laws don’t look like they will see any big change anytime soon, specifically when it comes to homes that are stigmatized as haunted. In a court of law, it’s hard to prove the presence of a ghost on a property. “I don’t see how you could ever … unless there’s some amazing discovery, but I don’t think you could win a case about ghosts without proving that there are ghosts,” Weissman said. “And so far no one has proved that there are.”
Weissman pointed out that the Georgia Association of Realtors was heavily involved in crafting the current stigmatized property statute. His advice echoes that of Hagley’s — even if the law doesn’t require it, be as transparent as possible. “Follow the old ‘disclose, disclose, disclose’ obligation,” she said.
Agents across the country have had to deal with spooky homes that have a pretty dark history. Robert Giambalvo, a Redfin agent based in California, recently sold the infamous Los Angeles house that was the site of the Manson murders of Leno and Rosemary LaBianca in 1969. The “Ghost Adventures” host Zak Bagans bought the home, which makes obvious sense for his interest in the supernatural. Giambalvo said he didn’t experience anything strange or out of the ordinary while showing the home, but his biggest challenge was weeding out the serious clients from the Instagrammers wanting a photo-op. “We probably had over a hundred tour requests [but] probably only showed it to about 20 people,” said Giambalvo. “There’s no photography allowed… they have to demonstrate their ability to purchase.” This included clients showing Giambalvo their bank statements and getting pre-approval from their banks.
Aside from the home’s gruesome history, the 280-degree views of downtown LA made it desirable to many, Giambalvo said. Many buyers didn’t even ask him questions about the home’s past. “How long does something need to pass where something like that becomes insignificant?” he asked. “I bet you that most of the people that saw the house were probably born after 1968, so it’s not really a significant thing to them.”
Hagley’s advice when showing stigmatized homes is to keep your emotions out of it when dealing with a buyer. “If you’re showing an allegedly haunted home, be neutral because you don’t know how that prospective buyer feels,” she said. “If you’re in a home, be respectful. Also, if you do believe in the paranormal, the last thing you want to do is upset one of these spirits.”