Home For Sale: 2BR, 1BA, 1 Ghost
Can a seller of real property be liable to a purchaser for not disclosing that the property is haunted?
This being October, and October being the month for Halloween, we thought what a better way to combine real estate law and Halloween than to delve into the subject of haunted houses. Specifically, if one is selling a haunted house, does he or she have to disclose to the buyer that the house is haunted? Of course, this being a legal question, the answer is “yes” and “no” and, well, “maybe.”
Alabama has some well-known haunted houses thanks to the late Kathryn Tucker Windham and Jeffrey, the ghost that resides in her family’s home in Selma, Alabama. In 1969, Mrs. Windham wrote her Southern folklore book 13 Alabama Ghosts and Jeffrey. In her book, she tells the story of 13 haunted mansions, places and events throughout Alabama. Some of these include the former Rock Hill Castle in Courtland, the Drish House in Tuscaloosa, Carlisle Hall in Marion, the specter in the maze at Old Cahawba, the face in the Pickens County courthouse window in Carrollton, Gaineswood in Demopolis, and the ghost steamer Eliza Battle on the Tombigee River. Other reportedly haunted sites in Alabama include Sturdivant Hall in Selma and Sloss Furnaces in Birmingham.
So what do I do when I want to sell my haunted house? Do I have to disclose that the house is haunted? The legal issue is whether the property has been “stigmatized” and is a “psychologically impacted” property. Typically, this involves property where a murder, suicide or other unusual death occurred or where a prior owner suffered from an illness such as HIV/AIDS.
California opened the door to this issue in the case of Reed v. King. In Reed, an elderly woman purchased a home that had been the site of a gruesome murder of a mother and her four children ten years earlier. The murder was not disclosed, and the purchaser discovered the home’s history after moving in. She sued for fraud and rescission of the contract. The appellate court found that murder is so disturbing that buyers may be unable to reside in a home where it has occurred, and the court went on to note that murder is not such a common occurrence so as to impose a duty of inquiry upon a buyer. The court further held that if the seller has information only accessible to the seller which has a significant and measurable effect on market value and the seller is aware of this effect, the duty to disclose does not turn on the character of the information (physical, stigmatic, or otherwise). The court remanded the case for the trial court to conduct a hearing on these issues.
Now, this opinion wasn’t very popular around the country, and numerous states moved to prohibit these types of lawsuits. Legislatures in Colorado, Connecticut, Georgia, Illinois, Louisiana, Maryland, Missouri, Nevada, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Wisconsin and even California passed statutes declaring that no cause of action arises for failure to disclose a murder, suicide or other occurrence (including illnesses) which have no effect on a property’s physical condition. The statute in Massachusetts goes so far as to include “real property [that] has been the site of an alleged parapsychological or supernatural phenomenon.” 
The most famous haunted house case is the New York case of Stambovsky v. Ackley. In Stambovsky, the buyer of a home sued the seller for not disclosing that the home was “widely reputed to be possessed by poltergeists.” Because the presence of the “spectral apparitions” was discussed by the seller in the national publication Reader’s Digest, twice in the local press, and the home was included in a walking tour of the town as “a riverfront Victorian (with ghost),” the court in the most famous line from its opinion held that the “defendant is estopped to deny their [referring to the ghosts’] existence and, as a matter of law, the house is haunted.” The opinion is worth reading just for all the ghost, spirit, and other “phantasmal” idioms and puns used by Justice Rubin.
So, what happened? New York law required the application of the doctrine of caveat emptor – “let the buyer beware” – which required the buyer to act prudently to assess the physical condition of the premises, but the court choose to distinguish the facts of the case from the existing law and allow rescission of the purchase contract. The court’s rationale was that the seller “deliberately fostered the public belief that her home was possessed,” and she was taking “unfair advantage of the buyer’s innocence” on a topic which he was unlikely to even inquire about.
Closer to home, Alabama is also a caveat emptor state regarding the sale of “used” residential real estate and raw land (there is an exception in Alabama to the rule for “new” homes). However, Alabama does not have a statute addressing “psychologically impacted” property, and there do not appear to be any Alabama cases addressing the sale of a home in which a murder or suicide occurred or a home which is otherwise occupied by a poltergeist, ghost or a haint. In Alabama, disclosure of material defects in a “used” residential home is only required when the defect affects the health, safety or welfare of the purchaser.
So, in Alabama does the presence of a ghost fall into a category that requires disclosure to a potential purchaser? Maybe or maybe not. Depending on the factual circumstances, it could likely be argued both ways. Therefore, the best solution is to call the Law Offices of Thomas J. Skinner, IV, LLC, and let us help you with this supernatural question. Kathryn Tucker Windham, 13 Alabama Ghosts and Jeffrey, Strode Publishers, 1969.  Reed v. King, 193 Cal. Rptr. 130 (1983).  Daniel M. Warner, Caveat Spiritus: A Jurisprudential Reflection Upon the Law of Haunted Houses and Ghosts, 28 Val.U.L.Rev. 207 (1993) (Unlike the other states, California did not completely prohibit these actions but limited their time and scope).  M.G.L. Ch.93 §114.  Stambovsky v. Ackley, 169 A.D.2d 254 (1991).  To be clear, the court made this finding “as a matter of law,” not as “a matter of fact.” The court did not actually adjudicate whether or not there are such things as ghosts or other such supernatural phenomenon.  See, e.g., Clay Kilgore Const., Inc. v. Buchalter/Grant, LLC, 949 So.2d 893 (Ala. 2006).  A “haint” is a Southern colloquial term for a ghost. Hence, a “Haint Blue” porch ceiling in the South.  See, e.g., Fennell Realty Co., Inc. v. Martin, 529 So.2d 1003 (Ala. 1988).