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It could be your worst nightmare – you buy a house only to discover it has a grisly past.
It may not be as much of a nightmare as it was for those living through the horror, but how can you be sure the house you are planning to buy is not haunted by a murder, violent crime or suicide?
The answer is you can’t be sure, but real estate agents are obliged to tell you – if they know.
The Real Estate Agents Authority says it’s all about disclosing “sensitive issues” and the High Court has provided guidance on the matter following a case two years ago.
Twelve months before the new owners bought their house, a tenant had committed suicide in the garage. This information was not passed on to the buyers, even though the agent selling the house knew about it. The agency had decided that because it was a personal matter of the occupants and did not relate to the condition of the property it did not need to be disclosed.
Five months after purchasing the property the owners decided to sell it and entered into a sale and purchase agreement. The first they knew about the sad history was when a neighbour asked them if they were on-selling so quickly because of the suicide. The owners disclosed this to the purchaser who did not want to move in and subsequently on-sold the property before settlement.
The agency was found guilty of unsatisfactory conduct and a subsequent appeal was dismissed. The agency then appealed to the High Court which upheld the appeal and overturned the finding.
The case prompted Justice Thomas to provide some High Court guidelines for real estate agents.
1. If you are faced with a sensitive issue you need to consider whether or not it is something you need to disclose.
2. It is not just unnatural deaths that you need to consider disclosing, but also other matters, such as particularly vicious crimes.
3. You must consider each situation based on its facts, but the types of considerations that might be relevant include:
– The fact that a murder, manslaughter or suicide has occurred in the property.
– The location of the event. Sometimes it will be reasonable to view a tragedy in the grounds of a property differently from one in a living area of a house.
– How long ago the event happened.
– The circumstances following the tragedy. For example, whether the house has been lived in and, if so, for how long.
– The circumstances of the tragedy and whether the tragedy has a degree of notoriety (even if just in the local neighbourhood).
– The likely reaction of potential purchasers and the possible impact on the price.
4. Make sure that you discuss disclosure with your vendor client and take their views into account when making your decision. You cannot make disclosure without the consent of your vendor. If you are of the view that disclosure should be made, but your vendor will not agree, then the only appropriate action for you to take is to cease to act for the vendor and not disclose the information.
The guidelines say there is no need to advertise the information or tell everyone who views the property. But there is an obligation to tell purchasers who have indicated an interest in submitting an offer on the property.
At the time of the case the judge noted that a natural death will not need to be disclosed. “That is an everyday occurrence. But suicide, although relatively common, carries with it feelings of unease and is generally regarded with some disquiet amongst most cultures.”
Houses where murders have occurred do sell, but the history undoubtedly impacts on the price. The Palmerston North house where Mark Lundy murdered his wife Christine and daughter Amber in 2000 was sold in December, 2002. The Karamea Cres property, valued at $106,000, was sold for $70,500.
In March last year, the house went back on the market for a week before being taken off due to publicity with Lundy’s retrial under way at the time. However, an industry insider says he believes the house has since been sold privately.
“These houses do sell, but there is always a stigma, even after all these years.”
A house in Elizabeth St, Taupo, where pest eradicator Martin Cranswick Schofield murdered his partner Katrina Rose Drummond with a hammer, was sold at auction a year ago, two days after Schofield was sentenced. A Bayleys Real Estate spokesperson said they can’t release details, but they had a “happy buyer and a happy seller”.
Continue reading this article at the original source from Stuff.co.nz
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