In real estate, stigmatized property is property which buyers or tenants may shun for reasons that are unrelated to its physical condition or features.[1] These can include murder, suicide or even AIDS,[2] in addition to a belief that a house may be haunted. The concept is controversial.
Famous homes, such as those used in television productions or filmmaking, can also be stigmatized by increased traffic from fans wanting to see the house in person. One such home is the house at 112 Ocean Avenue in Amityville, New York, made famous in the film The Amityville Horror. In this house, Ronald DeFeo, Jr. murdered his family. The Lutz family claimed that, a little over a year later, evil spirits drove them from their home; their claims have been "authenticated" by the Catholic Church and by paranormal investigators Ed and Lorraine Warren. The late Hans Holzer also maintained to his dying day that the spirit of a long-dead Indian chief haunts the property. Since the film's release, the house has been renovated and the address changed in an attempt to prevent sightseers from disturbing the neighborhood.
It is argued that the seller has a duty to disclose any such history of the property. This, in practice, falls into two categories: demonstrable (physical) as well as emotional. These guidelines vary from state to state.
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At least in the United States, the principle of caveat emptor ("let the buyer beware") was held for many years to govern sales. As the idea of an implied warranty of habitability began to find purchase, however, issues like the stigma attached to a property based on acts, "haunting", or criminal activity began to make their way into legal precedents.[3]
In Stambovsky v. Ackley the New York Supreme Court, Appellate Division, affirmed a narrow interpretation of the idea of stigmatized property. The court held that since the property in question was previously marketed by the seller as a "haunted house" he was estopped from claiming the contrary. The majority opinion specifically noted that the veracity of the claims of paranormal activities were outside the purview of the opinion. Notwithstanding these conclusions, the court affirmed the dismissal of the fraudulent misrepresentation action and stated that the realtor was under no duty to disclose the haunting to potential buyers. Several states have created specific statutes in the US adding "stigmatised property" verbiage to their legal code.
Many jurisdictions recognize several forms of stigmatized property, and have passed resolutions or statutes to deal with them. One issue that separates them is disclosure. Depending on the jurisdiction of the house, the seller may not be required to disclose the full facts. Some specific types must always be disclosed, others are up to the jurisdiction, and still others up to the realtor.[4]
The types include: