Stigmatized property sales are sales of homes where there has been some kind of misfortune happen. For example, all the following situations would cause a property to be considered a stigmatized property: suicide, murder, cult activity, famous crimes, and famous adulteries. for example, the home where Nicole Simpson was murdered was a stigmatized house and it sold for much less than it otherwise would have. The question addressed in this blog post though is this: Are you required to disclose the whole story if you are selling a stigmatized home?

Some people don’t see the point. They don’t believe in apparitions or spirits, so what difference does it make if a death occurred in the home? The point is that enough people would be uncomfortable with living in a stigmatized home that it can actually affect the sales value. Still, caveat emptor is the main policy. In many states, you won’t have to disclose something like that i. Now, that doesn’t mean you can lie though. As a home seller, you are never allowed to misrepresent a home. You do have a duty to be truthful in all your answers to any questions. Even evasive answers will count as misrepresentation if the situation ever went to court once the buyer found out.

California’s Special Law About Stigmatized Homes

There are exceptions to caveat emptor in California though.  The California Civil Code requires sellers to disclose to the buyer if a death happened at the property within the most recent three years, unless the death was related to AIDS. So, if a murder or suicide happened at your California home within the previous three years, you actually have an obligation to disclose this information up front.

California civil courts increasingly holding stigma-related defects to the same disclosure standards as actual physical defects. This is because it really does affect the resale value of the house.

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