Could Your House Be Haunted? If So, It May Affect What You Have To Tell Potential Buyers

If the house you're selling comes with 3 bedrooms, 2 baths, a finished basement, and something that goes "thump" in the night, do you have to mention that last part when you're talking to potential buyers? While not everyone believes in ghosts, about 45 percent of people in the U.S. admit that they do—which makes this an issue that could cause your realtor to cringe. Here is what you need to know.

What are the laws on material defects and ghosts?

While the laws on what actually constitutes a "material defect" vary from state to state, the general principles are the same: you're supposed to play fair with potential buyers and warn them about anything that could affect their decision to buy your home.

The disclosure form that you fill out often has a list of specifics that cover things like insect infestations and leaks that only show up during heavy rains, there's always a section that asks about anything else not mentioned on the form. In some states, the law requires you to list any recent deaths that occurred on the property. In other states, it's only an issue if the deaths were due to violence, like a murder or suicide. However, if you believe that the house is haunted and have experienced something paranormal on the property, you should disclose it as a potential defect—even if you aren't legally obligated to report on any on-property deaths that you know about. 

What could happen if you don't disclose the ghost?

There's already been at least one case that's addressed this issue, and it's often cited in law schools. In the "Ghostbuster's ruling," the New York Supreme Court held that a house was legally haunted. It's owner, Helen Ackley, had made quite a show out of her haunted home in the years prior to the sale. She'd even given interviews to the local paper and included her home on a tour of haunted homes in the city. Somehow, however, she'd neglected to mention all this to Jeffrey Stombovsky, an out-of-towner, when he expressed an interest in buying the house and put a down payment on it. When he found out the house's reputation, he was less than pleased and sued to rescind the contract and get back his money. 

What if you aren't sure if the house is really haunted?

What if you aren't a true believer and think that the creaking and groaning you hear at night are more likely the house settling than spirits rustling? If the stories of the house being haunted are the stuff of neighborhood legend and nothing that you've observed personally, you may not be under any duty to disclose anything. Unlike Mrs. Ackley, if you aren't out there promoting your house as being a home for wayward spirits, you aren't creating a precedent that you'd have to try to deny later. 

However, if you know that the subject is likely to come up after your house is sold when some nosy neighbor decides to ask the new owners if they've been subject to apparitions in the night, you may want to consult with a real estate attorney, such as John M. Ogden, before you begin the selling process. That way, you'll be clear on what your obligations are under the laws of your state before you start—which should at least keep the house sale from coming back to haunt you in court.