Death and Real Estate Disclosure Laws

Occasionally the question of real estate disclosure of death on a property comes up, and while it seems fairly clear, there are some big legal loopholes. More than that, in my business, the question of looms, why is it a concern at all?

I’ve been told that the greatest driver of disclosure is the Chinese community, as Chinese buyers do not want houses that have had a death within them. Clearly, it’s bad feng shui, and a ba gua mirror won’t do anything to help. It’s my feeling, however, that everyone is sensitive to the energies emitted by persons as they approach death, which, in this culture, are primarily negative ones. Without knowing how we sense them or why we feel what we do, we prefer to avoid these houses, and buyers can be particularly keyed in to what they are experiencing in a potential home.

Not everyone pays attention, however. I’ve worked with lots of clients who suffered some level of buyer’s remorse, because they didn’t pay attention to that niggling little voice, or feeling in their gut, and dropped a bankroll on a house that came with something extra! I’ve also helped plenty of sellers who couldn’t figure out what was holding their house in stasis, but when it comes to the law, energetic phenomena are nowhere near as clear cut as a termite problem.

Legal Precedent
To begin with, there was Reed v. King, in 1986, which involved the disclosure of a multiple murder in a Los Angeles home. The buyer successfully proved that the murder at the site adversely affected the property’ value, even though it occurred more than three years prior to their purchasing the home. The Reed v. King decision led to …

California Civil Code Section 1710.2

(a) No cause of action arises against an owner of real property or his or her agent, or any agent of a transferee of real property, for the failure to disclose to the transferee the occurrence of an occupant’s death upon the real property or the manner of death where the death has occurred more than three years prior to the date the transferee offers to purchase, lease, or rent the real property…

(d) Nothing in this section shall be construed to immunize an owner or his or her agent from making an intentional misrepresentation in response to a direct inquiry from a transferee or a prospective transferee of real property, concerning deaths on the real property.

Lawyer Talk  > The statute affirms that a death on a property need not be disclosed if it occurred more than 3 years prior to a sale, but the statute does NOT say that a death within 3 years must be disclosed. If a death occurs on a property within 3 years of sale, and the circumstances of that death are otherwise material to the value of the property (it was a violent or publicized death, or affected the reputation of the property), it must be disclosed.

Privacy protections for AIDS patients were further clarified in California statute by limiting the Reed findings to those deaths unrelated to AIDS or other causes. A seller need not disclose AIDS-related deaths, no matter how recent, nor in fact, any other kind of death, unless it adversely affects the property’s value!

Effectively, no one need disclose anything, as the question of adverse affect on property value is arguable at best. In all my clients’ cases, their piece of mind came at the cost of my fee, which I see as a debit to the property’s value. For those who suffer inordinate psychological (and even physical) distress, energetic problems can become quite financially burdensome.

While California is the only state that fumbles with such a requirement, there are several states that affirm the right of the seller not to disclose, and even here in California Foreclosure Sales are Exempt from Disclosure laws!

If you’re a seller or a realtor and have a house where a death occurred, the fact is you needn’t disclose, but if you want it to sell, and for your buyer to feel comfortable and not misinformed, you may want to contact me.

If you’ve purchased a house with some level of disturbance, you’ll definitely want to read Healing Houses and possibly contact me too. It will likely be difficult and expensive to push the disclosure issue legally, and your recourse will probably be unsatisfactory.

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