Selling a haunted house? Legally, you might have to tell your potential buyer all the creepy details


Selling a haunted house is no easy matter

As crazy and strange as it sounds, some sort of paranormal activity in homes is far more common than we would like to admit. The problem with having a haunted house, even if it is just rumored to be haunted, is that it could directly affect the value of the property since very few people would willingly move into a home with a reputation for paranormal activity.

That automatically puts the sellers of a haunted home in a bind; if they disclose the fact that there are, lets say, ghosts in the house, then the value drops and it will be much harder to sell, but if they keep it a secret, they might end up with a lawsuit depending on what state they live in.

Stigma-what?! Who cares if there’s weird stuff happening!

Well, about half of the states in the U.S. have laws that care about ‘stigmatized properties’ and include haunting as a cause to classify them as such.

“In real estate, a stigmatized property is property which buyers or tenants may shun for reasons that are unrelated to its physical condition or features. These can include murder, suicide, or even AIDS, in addition to a belief that a house may be haunted.” source: Wikipedia

Basically, the laws in these states are trying to protect buyers from unwittingly purchasing a home that has a lot more to it than meets the eye, particularly if what is being hidden from the buyer is well known to others and will affect the property’s value. On the other hand, many states don’t consider a haunted property to be stigmatized or have a material defect, and therefore there is no legal obligation to talk about ghosts or poltergeists.

New York sets the standard

In New York state, due to a well known appellate court ruling on a haunted house sale that ordered the sellers to refund the buyer’s money, the law requires disclosure.

To make a long story short, a house was purchased that was well known locally to have a reputation for being haunted. The seller, Helen Ackley, had previously reported ghosts in her home to Reader’s Digest and local newspapers, making mention of poltergeists and paranormal events affecting her family while in the house.

Eventually, the house was sold to Jeffrey Stambovsky who was not told of the paranormal ‘popularity’ of the house. Only after signing a contract and putting forward a down-payment, Stambovsky learned about the abundant haunting stories concerning the property he had just purchased. He took the case to court to receive his money back and nullify the contract. Although he lost the first round, Stambovsky then appealed the ruling and won in the appellate court which said the following:

“Having undertaken to inform the public-at-large, to whom she has no legal relationship, about the supernatural occurrences on her property, [the seller]may be said to owe no less a duty to her contract vendee… [H]ere, the seller not only takes unfair advantage of the buyer’s ignorance but has created and perpetuated a condition about which he is unlikely to even inquire… Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine of caveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural bargain.” Source Wikipedia: Stambovsky v. Ackley

The interesting part of the initial majority opinion made mention that it didn’t matter whether or not the house was actually haunted:

“Having reported [the ghosts’]presence in both a national publication… and the local press… defendant is estopped to deny their existence and, as a matter of law, the house is haunted.” Source Wikipedia: Stambovsky v. Ackley

So if your home is widely reported to be haunted, in the eyes of the law in New York State, it’s equivalent to actually being haunted.
Not fun if you’re stuck selling a haunted house in New York.

Even if state law doesn’t require disclosure if your house is haunted, should you bring it up anyways?

If you do a quick google search on real estate law and haunted houses, you’ll actually find guides written for realtors on how to handle the sale of haunted properties. For one, they mention to first check with state law on whether or not disclosure is required. They also seem to have a common theme that even though it may now be required by law to be up front about ghost rumors, it could definitely damage the sale if the buyer found out the information from a neighbor.

Sometimes though, even being up front in a state that doesn’t require disclosure can cause problems with the sale. You can read here about a Pennsylvania couple who put their house for sale on the market as ‘slightly haunted, nothing serious though.”  They didn’t exactly attract the buyers they were hoping for.

Conclusion: It’s not easy

Putting the legal issues aside, there is really no easy way to sell a house with a reputation for being haunted.
Depressing as it sounds, there are a few entertaining guides out there that try and help real estate agents and sellers navigate the difficulties of selling a haunted house.

FEATURED IMAGE: By Harald Hoyer from Schwerin, Germany [CC-BY-SA-2.0], via Wikimedia Commons


About Author