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Dealing with stigmatized properties

March 25, 2011
By MARIO D'ARTAGNAN, Real Estate in Perspective

Today's article focuses on stigmatized properties and exactly what disclosures, if any, are required. Basically, a stigmatized property is one where some event produces more of a psychological impact rather than a physical impact or defect. Property may be stigmatized by events like murder, suicide or drug-related arrest, or the property may be considered haunted by ghosts or spirits. Stigmatized property also includes those premises on which a famous person may have once lived.

Although the Florida Legislature has enacted laws regarding the disclosure of stigmatized property, practitioners should suggest to sellers that disclosure of such matters might prevent future litigation. Licensees may also wish to use a disclosure statement recommending that buyers consult a variety of resources for information on issues affecting resale or intrinsic value.

Chapter 689.25(1), F.S., provides that the fact a property was the site of a homicide, suicide or death is not a material fact that must be disclosed in a real estate transaction, nor will the failure to disclose such information be the basis for a civil lawsuit. In California, licens-ees must disclose whether the property has been the site of a murder or suicide within 3 years of the property being marketed for sale or rent.

Another issue for many purchasers is the supposed presence of spirits in a home. While some licensees may find this matter humorous, buyers my not share that perspective. Some buyers may see the karma, or spiritual nature of the home, as a primary buying issue. Other states have legislation addressing the issue of supernatural inhabitants of dwellings, but Florida offers no such guidance to its licensees.

In 1989, there was a New York case where the buyer, Jeffrey Stam-bovsky put $32,500 down on a Victorian mansion in Nyack, N.Y. An architect refused to work on the home, claiming it was haunted. Stambovsky then discovered that the seller had discussed the home's ghosts in a Reader's Digest article years before. The ghosts were described as cheerful, entertaining and dressed in Revolutionary War-era clothing. Though a lower court ruled that the seller had an obligation to tell the buyer about the ghosts, the New York Supreme Court ruled otherwise: the seller did not have a duty to reveal her beliefs about supernatural inhabitants or to discuss her published stories (169 A.D.2d 254, 572 N.Y. S. 2d 672).

Another challenging issue is the subject of convicted sex offenders. Many buyers understandably desire information about the possible presence of sex offenders. Enacted in 1996, Megan's Law requires that public law enforcement agencies register and disclose the addresses of such offenders. However, state rules vary in the implementation of such disclosure. Some states maintain a public database; others require that interested parties contact law enforcement online list of registered sexual predators. Prospective buyers can easily access the list and search by name or zip code.

Florida law does not address real estate licensees' responsibilities in notifying customers about sex offenders. However, that my change soon.

A lawsuit was filed in 2006 by a couple in Melbourne, Fla., who say they should have been told of a neighboring offender before they bought a house in a quiet, middle-class subdivision. This lawsuit could set a precedent in Florida, where an absence of statutes and case law leaves the 2005 sale up to the court.

If you are in the process of purchasing a home and would like more information, please visit:

Some information contained in this article was obtained from Bert Rodgers Schools of Real Estate, and is educational and evidentiary in nature. Please visit:

Mario D'Artagnan is a broker associate with Paradise Realty, specializing in domestic and European clientele. He is a former Florida Real Estate Commission investigator, a former real estate instructor, and a published author. He is also a U.S. Air Force veteran. For more information or questions, contact D'Artagnan at: mariodartagnan@yahoo .com, or call 239-565-4445.



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