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Property Law and Belief in Ghosts:

In my introductory Property law class, I recently taught Stambovsky v. Ackley, the famous 1991 New York appellate decision which ruled that the seller of a home had a legal duty to reveal to the buyer the fact that the house was widely believed to be haunted by ghosts. The court famously opined that the house was "haunted as a matter of law," though the more prosaic basis for the decision was the fact that a reputation for being haunted could damage the resale value of the house even if there weren't really any ghosts there.

Interestingly, a recent AP survey reveals that 34% of Americans believe in ghosts and 23% claim to have actually seen one. A 2006 poll found that 37 percent believe that a location can be haunted.

Arguably, these poll results strengthen the case for the court's ruling in Stambovsky. If belief in ghosts and hauntings is widespread, a reputation for being haunted could seriously depress a home's value, and potential buyers have a legitimate interest in knowing about it before deciding to purchase. On the other hand, the poll results probably overstate the number of people who actually take ghosts seriously, in the sense of letting their belief in ghosts dictate major life decisions (such as what house to buy). As I discuss in greater detail here, people often adopt irrational beliefs when there is little or no cost to doing so. But they are less likely to follow those beliefs when the costs rise. For example, some 50% of Americans believe that we are being visited by UFOs flown by extraterrestrials. But only a tiny minority act on that belief by seriously preparing for the possiblity of alien visitation or invasion.

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