Haunted House Hunting and the Duty to Disclose

In a competitive real estate market like Greater Boston's, more homebuyers are agreeing to what previously would have been seen as a draconian contract term: purchasing a home without first conducting an inspection. But today, in a hot seller's market, it may be a buyer's best hope to landing the winning bid. The perils of buying a home before learning about things like the property's structural soundness would spook most anyone, not just the most risk adverse. But what about the intangibles that even a traditional inspection wouldn't reveal? One Massachusetts statute defines the obligations of a seller of real property that is potentially "psychologically impacted." Specifically, G.L. ch. 93, § 114, carves out "alleged parapsychological or supernatural phenomenon" as a non-material fact, that is, information that does not need to be disclosed by a seller during a real estate transaction.

In addition to the paranormal, the law also allows a seller and her agent to keep mum about whether "the real property was the site of a felony, suicide or homicide." G.L. ch. 93, § 114, like many of its counterparts in other states, reflects the idea that a non-physical factor, even one with the potential to carry significant stigma, is not a vital element if it has no impact on the property's structure or physical environment. While the law does not require the offering up of salacious details like a home's history of haunting or crime, it stops short of permitting misrepresentations. In other words, affirmative misstatements are still out of bounds. In line with the general Massachusetts rule of caveat emptor or "buyer beware," when it comes to real estate transactions, if a seller or broker is specifically asked about his knowledge of any ghosts or Lizzie Borden-like episodes, a false statement is not permitted.

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