The importance of informing potential buyers if a house has a stigmatised history: David Airey
It sometimes happens that a property on the market for sale or rent has been the site of a murder or gruesome death. For example, a few years ago the sale of a house in Sydney that had been the scene of a grisly murder by Seth Gonzales became the subject of national attention and court proceedings when the buyers learnt to their horror that their new home was the scene of a gruesome murder.
In this situation and similar cases, what are the obligations of the sales representative or property manager in advising the potential buyers or tenants about the history of the property?
Such properties are known as 'stigmatised houses', and agents are obliged to be transparent with potential clients. If an agent knows that a house has been stigmatised then it is incumbent on them to advise the client, prior to a sale or leasing contract. The stigmatization does not need to be noted in the marketing for the property but raised with clients if a deal is to be struck.
There is an obligation to make reasonable enquiries. However, where an agent has been informed by the seller, or should know of that material fact, and he or she feels that knowledge of the stigmatization is reasonably likely to affect the decision of the client, then this information must be disclosed at the right time during the transaction.
Some people for religious, superstitious or cultural reasons take these matters very seriously and want to make an informed decision about their purchase on this basis. As a buyer or renter you are entitled to ask.
It is important to note that there are no specific government guidelines, rules or laws on this issue and agents are acting on a case-by-case basis using their own judgement.
What about future transactions? As time passes certain stigmas can fade but agents are still required to use their judgment.
If nanna died of natural causes in the back bedroom ten years ago, there's probably no need to disclose this. The general feeling is that stigmatization probably applies to more recent events. Indeed, many homes older than 50 years have probably been witness to familial deaths in the days before nursing homes and our quality medical system.
Searching for property addresses on the internet and social media generally now makes it virtually impossible for people not to know about dramatic events that stigmatize particular homes and agents who value their reputation are hardly going to risk that by being circumspect.
Interestingly, the evidence suggests that stigmatized homes that are marketed with disclosure will sell or rent with no obvious variation to the market rate. While some people will expressly avoid a stigmatized home many other people are not bothered.
David Airey is president of the Real Estate Institute of Western Australia.