Real Estate Disclosures – Murder/Suicide Not a Defect
Last Monday, July 21, 2014, the Pennsylvania Supreme Court entered what should be the final opinion with respect to whether a home seller in Pennsylvania needs to disclose that a murder/suicide took place in the home. I had posted two previous blog articles, one on February 28, 2012, entitled “What Do You Mean My House Is Haunted”, and a second one on January 30, 2013, entitled “Real Estate Disclosures – Does It Matter If My House Is Haunted”.
You may remember that this case involved a lawsuit by a home buyer who, after settlement, discovered that the home she had bought and improved had been the site of a murder/suicide where a previous owner had allegedly killed his wife and himself on the property. She contended she would not have bought the house had she known of this crime. Originally a three judge panel of the Superior Court held, in a two to one decision, that the murder/suicide could be a material defect in the property requiring disclosure under Pennsylvania disclosure law. In January of 2013, the Superior Court reversed the panel’s decision on the basis that the disclosure of psychological defects would be a descent down a very slippery slope.
The case was appealed to the Supreme Court and, in Monday’s decision, the Supreme Court, in what they stated was a matter of first impression, decided the underlying question . . . whether psychological stigmas are material defects. The Court determined that to require the disclosure of psychological defects would clearly be beyond the intent of the disclosure law. The Plaintiff argued that the psychological stigma on the property reduced its value and that the failure to disclose this tragic event constituted a material defect. The Court, again mentioning the slippery slope of determining what a particular buyer may find objectionable, stated that efforts to define those that would warrant mandatory disclosure would be a Sisyphean task. (We will all remember that Sisyphus was punished for chronic deceitfulness by being compelled to roll an immense boulder up a hill.)
The Court also stated the occurrence of a tragic event inside the house does not affect the quality of the real estate, which is what the seller disclosure duties are intended to address.
The Court also determined that the event was not a latent defect. The murder/suicide was well publicized with coverage appearing in print and on the Internet. The Court stated that the Plaintiff possessed the tools to discover the murder/suicide and did not do so even after suspecting some other factor was involved.
Craig Russell is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, Pennsylvania. He received his law degree from Temple University and has been practicing in the area of real estate law, both commercial and residential, for over 40 years.