How do you know if you could be buying a “stigmatized property?”

On Behalf of | Sep 11, 2023 | Residential Real Estate

For many home buyers, it doesn’t matter what may have happened in or on the property in the past — as long as it’s in good condition now. Others don’t want to live in what’s considered a “stigmatized property” – at least in some types.

Homes can be considered stigmatized due to any number of things, including:

  • A death in the home – especially if it involved murder or suicide
  • Paranormal activity – in other words, reports of “ghosts” or other unexplained weirdness
  • Criminal activity of any kind
  • “Public intrigue” – for example, a house used for exterior shots in a well-known TV show or movie

Do the sellers or their real estate agents need to disclose any of this information to potential buyers? State laws vary. Here in New York, no death, criminal activity or other stigmatizing feature of a property has to be disclosed.

That doesn’t mean, however, that you can’t do your own research and ask questions. New York law states that buyers may “when negotiating or making a bona fide offer, submit a written inquiry for such information.”

What are real estate agents’ obligations?

While real estate agents aren’t required to proactively provide this information, they are prohibited from lying if asked. They should also be guided by the ethics of their profession. The National Association of Realtors advises its members to disclose any information that “could affect a reasonable purchaser’s decision to purchase”.

For example, if a home was once the site of a meth lab or the previous owners died from a carbon monoxide leak, that might create a risk to anyone who moved into the home if it wasn’t fully decontaminated. This is one reason why it’s crucial to get at least one independent inspection of a home before you buy it.

Despite the lack of requirements for disclosure of various stigmas on a property, there are a multitude of disclosures that sellers are required to make fully and accurately. If that wasn’t done and you’ve suffered harm as a result, it’s important to determine your legal rights.