Is it legal to sell a haunted house?
Yes. New York is the only state that requires some form of disclosure to prospective buyers. Other states generally follow a "buyer beware" approach when it comes to selling a haunted house. Some places require the disclosure of homicides, suicides, and other deaths, but laws vary when it comes to a property seller's obligation to disclose prior criminal activity.
Do you have to disclose ghosts or other phenomena when selling a home?
Generally, disclosure is required when the owner has publicly stated that the house is haunted. Often, haunted houses are known in the community, but those outside of the community may not be aware of the home's history. A home's infamous reputation can drive down the property's value and may even affect other properties in the neighborhood. Property sellers can protect themselves by including information in a Real Estate Purchase Agreement.
In 1991, a New York court ruled that failure to disclose to a buyer the public knowledge that a house was haunted was grounds for the buyer to be released from the signed contract. In that case, the seller had written several articles for national media about ghosts in the house. The home had also been featured on a walking tour of haunted properties.
What is a stigmatized property?
A stigmatized property is one that people believe has a history of criminal activity, hauntings, or horrible events. It may be physically and structurally sound, but its reputation makes it undesirable to buyers. In some cases, it is the responsibility of a seller to disclose certain stigmas.
It isn't just poltergeists and lost souls that can cause a bad reputation. Stigmatized properties may have been sites of gang violence, drug dealing, or other illicit activity. Some states and localities have laws that require certain crimes to be disclosed, while other areas protect homeowners from having to disclose information that could negatively affect property values. Sellers may make a Home Sale Worksheet to organize relevant information to disclose to interested buyers.
Do you have to disclose deaths on the property?
Most states have laws that require sellers to disclose to buyers when a murder has occurred in the home. Only a few states, however, require the disclosure of natural deaths that occured, usually within three years of the sale date.
While few localities require the disclosure of previous criminal activity, a seller may need to disclose that information if a buyer asks. Adding legally required disclosure information to a Property Sale Agreement helps sellers comply with their local laws. Buyers who want to know about previous deaths, criminal activity, and hobgoblins may want to include a disclosure provision in an Intent to Purchase Agreement.
What are the consequences for not disclosing this information?
Most U.S. states lack laws requiring disclosure of most deaths, criminal activity, or ghosts, so there are few legal consequences for sellers. Fifteen states require disclosure when a buyer asks, but there is no legal penalty if the seller is unaware or has not researched the property to find the answers.
Three states — California, Alaska, and South Dakota — require sellers to disclose whether an untimely or natural death occurred at the home within the last three years. In these states, the buyer may file a lawsuit against the seller if the required disclosure was not made.
Sellers can speak with a lawyer to find out about the specific laws and regulations in their area that dictate what must be disclosed and what can be left out.
Those weird knocking and moaning sounds in your Victorian house may be old pipes or the spirits of former inhabitants seeking a way to pass on. If you have more questions about selling a haunted house, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
