Suicide and other stigmatizing events: Is disclosure required?
In most of the nearly 20 states that have laws dealing directly with a licensee’s duty to disclose suicides, homicides and other stigmatizing events on properties for sale, licensees do not have a duty to disclose the event — except when directly asked.
Pennsylvania licensees enjoy no such statute, however, in 2007 President Judge Robert E. Kunselman at the Court of Common Pleas of Beaver County granted preliminary objections and dismissed counts of a Complaint seeking rescission and damages for fraud based on the failure to disclose a suicide that occurred in a home sold to the Plaintiffs. At issue was whether a suicide in the house was a “material defect” that required disclosure by the seller and the real estate licensees. In his ruling, Judge Kunselman held that the prior owner’s suicide in the master bedroom of the residence “is not a legal issue that would interfere with the use and enjoyment of the property.”
As you might expect, the facts of the case were gruesome. At the time of the home’s offering for sale, one of the property’s bedrooms was filled with furniture, its floor largely hidden from view. When the buyers did their final walk-through, they noticed the furniture had been removed from this bedroom. But a piece of carpeting — the same color and material as the carpeting underneath it — remained in the center of the room, covering the area previously obstructed by furniture. Once they owned the home, the buyers were told by their carpet cleaners that it was impossible to remove the blood stains from the carpeting.
In ruling on the case Judge Kunselman noted that a home buyer may be disturbed by the fact that a suicide occurred in the master bedroom. That, however, does not make it a material fact. Because the owner’s death was not a legal issue that would interfere with the purchaser’s use and enjoyment of the property — and because there was no evidence that home buyers ever articulated that suicide was material to their decision to purchase the property — the Court dismissed the action.
The decision is not surprising. The advice my office has given to Hotline callers has been consistent with the Court’s finding: in the absence of a clear inquiry, we do not believe there is a duty to disclose the events of the people who lived in the home or the maladies or conditions they endured.
There exists one possible exception to this principal. If the suicide is so notorious that it markedly impacts the value of the home, it should be disclosed. The Seller Disclosure Law requires disclosure of a material defect which is defined as “a problem with residential real property or any portion of it that would have a significant adverse impact on the value of the property.” Is it possible that a suicide will have a dramatic affect on value? We have not seen that case to date.
It’s important to remember that the duty to disclose will vary based upon the circumstances. There is presently pending in Pennsylvania at least one suicide case where the home buyers claim that the licensees had clear knowledge of their desire to not purchase a home where suicide was committed. How a phobia or desire is communicated may be pivotal. I think it is safe to presume that most people would prefer not to sit in a chair where a person recently died or to occupy a hospital bed whose last patient succumbed to his final illness.
Though the disclosure of a stigmatizing event may not be required in the absence of a clear inquiry, it is an appropriate subject to discuss with your seller before accepting the listing and embarking on a marketing strategy. One thing is reasonably certain: the buyers will learn of the suicide or homicide within minutes of their taking possession of the new home. When they do will they blame you for concealment, fraud and unfair practices? Even in the absence of a law suit, your reputation can take a hit when buyers perceive that you have pulled a fast one. Sellers may choose to reveal the events to prospective buyers and you have the option of not accepting the listing. Discuss the matter with your broker or office manager.
Jim Goldsmith, Esq. is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. He routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline.