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A Haunted House As A Latent Defect? They Sued & Won!

Real Estate Law: Disclose Latent Defects: Like a Haunting

How would you feel about living in a haunted house? Whether you believe in ghosts or not, there is something very unsettling about moving into a home that others claim has ghostly activity. It’s even more disturbing if you buy the home and only later find out that it is haunted, and that the seller and the real estate company hid the fact from you. It has the makings of a horror movie, but a case like this really played out in 1991 in New York.

Facts Of This Spooky Lawsuit

Jeffrey Stambovski was looking for a house, and he found what he thought would be the perfect location in idyllic Nyack, New York. He loved the look of the home, and even put down $32,500 on the $650,000 house. He hoped it would be the home of his dreams. Being from New York City, he didn’t know the reputation that the house had for being haunted. In fact, it turns out it was a rather famous home.

The previous owner of the home, Helen Ackley, had always claimed that her house was haunted, and that a number of her family members had had ghostly encounters and experiences on the property. The reports of ghosts had even been in the local newspaper, as well as Reader’s Digest a number of times between 1977 and 1989, the time at which Jeffrey bought the home.

Ackley had told the press about a number of strange phenomena that occurred in the home, including a ghost that would wake her up each morning. Jeffrey did not know this when he bought the home, but as soon as he learned of its reputation, he wanted out. Whether he was frightened by the idea of living in a haunted house, or he didn’t want the publicity it would bring is unknown. He did not attend the closing and wanted to rescind the contract.

The Courts Ghostly Ruling

Initially, the court sided with Ackley and the real estate company that helped to sell the house on the grounds of caveat emptor – let the buyer beware. Jeffery did not let this sit though, and he appealed his case. During the appeal, three out of the five justices that presided over the case agreed that the defendant could not deny the existence of ghosts and of the house being haunted, as the stories told by her had appeared in national and local publications. Therefore, the law said that the house was, for all intents and purposes, haunted. Since this was not something the buyer would be able to know, even during an inspection of the house (aka a latent defect), it was withheld from him. They eventually allowed him to rescind the contract.

Scared… Here Is What You Should Do…

This is surely a strange case, and one that still raises questions. Many people today wonder whether real estate agents are supposed to let people know whether a house has a reputation of being haunted. In reality, from a legal perspective, it does not matter if it is haunted or if it has a negative reputation for being haunted. If there is something that may affect the value of the property in a negative way, and a buyer cannot reasonable discover it as part of their due diligence, you may want to consider disclosing the fact. The truth is, it all depends on where the house is located and the laws in that area. So, the next time you hear something that goes bump in the night, you might wonder whether you bought a home inhabited by ghosts without ever knowing it.

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