Most students who take a property law class study the famous New York case of Stambovsky v. Ackley, where a New York court ruled that sellers of a house must disclose to potential buyers the fact that the house was reputedly haunted. The court concluded that the house was “haunted as a matter of law” and that the haunting qualifies as a latent defect, because it is a condition that might reduce the value of the house. Courts in some other states have ruled differently, holding that sellers only have a duty to reveal physical, structural, or legal defects, not poltergeists. However, as Josh Blackman notes (citing this Forbes article), one Pennsylvania seller recently noted the haunting in his house ad, with the result that he actually ended getting more interest than expected:
I went back and forth,” Gregory Leeson says when asked about listing his Dunmore, PA home as “slightly haunted” on real estate website Zillow. “I thought I might as well. I didn’t think it would generate this much interest.”
But since uploading his for sale by owner listing on Sunday, Leeson has received multiple offers and interest from buyers as well as ghost hunters across the country. The home has also ignited a growing discussion on Twitter, with many sharing their own haunted home stories:
Leeson’s somewhat tongue-in-cheek description of his home, which is listed for $144,000, begins by pointing out typical features — 4 bedrooms and 2.5 bathrooms — before delving into the property’s more unusual characteristics:
“Slightly haunted. Nothing serious though,” he writes in the listing. “The sounds of phantom footsteps. A strange knocking sound followed by a very quiet (hardly noticeable, even) scream.”
While some people might recoil at the prospect of living in a “haunted” house and others might not care, haunting could actually increase the value of the house by turning it into a potential tourist attraction. Indeed, the sellers of the house at issue in Stambovsky actually were advertising it as a haunted house and arranged its inclusion in a walking tour of the city of Nyack, NY.
Obviously, many people – including many of my property students, when I teach Stambovsky – react with incredulity to the very idea that ghosts might be relevant to the value of a house and that sellers have a legal obligation to disclose their supposed presence. As the dissenting opinion in Stambovsky puts it, “[t]he existence of a poltergeist is no more binding upon the defendants than it is upon this court.” I have a lot of sympathy for that position. Ghosts don’t actually exist, and their supposed presence has no tangible effect on the quality of a house.
But it’s worth noting that many things that affect the value of real estate are intangibles based on the arbitrary preferences of potential buyers. One such is the history and reputation of the house. For example, one of my students several years ago had lived near the house where serial killer Jeffrey Dahmer murdered his victims. He told me that the house went unoccupied for years afterwards, even though Dahmer was long gone, and the house had been refurbished. Rejecting a house because it was the site of a murder seems just as irrational as rejecting it because of a supposed haunting. It’s true that the murderer, unlike the ghost, was actually physically in the house at some point. But that has no relevance to the livability of the house years later. Yet many people clearly would prefer to avoid living in such a building. Even if a given buyer does not personally care whether a house was the site of a notorious murder or a supposed haunting, they might want to know about it because of its impact on resale value.
UPDATE: I should note that, technically, Stambovsky did not hold that sellers have an absolute obligation to disclose the fact that their house is reputed to be haunted, but merely that if they did not, the buyer could have the sale rescinded. However, as a practical matter, this means they do have an obligation to disclose if they want to effectuate a sale that the buyer cannot repudiate.