A decision handed down by a three judge panel of the Pennsylvania Superior Court last week reaffirmed when a murder or suicide takes place in a home it does not constitute a material defect, and therefore the seller is not bound to disclosure the occurrence of such a tragic event to a potential buyer.
Supreme Court President Judge Emeritus Kate Ford Elliott in a majority opinion wrote:
“Today, we find that psychological damage to a property cannot be considered a material defect in the property which must be revealed by the seller to the buyer”
The property at the center of the case was obtained by a buyer who was aware of the murder/suicide at the time of purchase, and who subsequently sold the property nine months later. The second buyer, who was unaware of the past notorious events, is sought legal remedy claiming the seller violated the disclosure law.
The plaintiff in the case hired two appraisers, who held the opinion that the property was diminished by as much as 10 percent to 15 percent as a result of the murder-suicide. A past court decision ruled that this constituted a “material defect”, which consequently devalued the property, and should have been disclosed.
The definition of a material defect in regards to the Sellers Disclosure is:
a problem with a residential real property or any portion of it that would have a significant, adverse impact on the value of the property or that involves an unreasonable risk to people on the property
The recent court opinion also noted potential problems and regarding what such a disclosure could create. First, how recent must an event be to require disclosure? Must a 100-year-old murder be disclosed or one that happened many owners ago?
Second, what monetary value should be assigned to such stigma? And thirdly, would crimes other than murder have to be disclosed? What about burglaries or even crimes that did not occur on the property but elsewhere in the neighborhood?
The ruling reinforces the principle of caveat emptor (buyer beware) and emphasises the importance of a potential buyer’s need to do their own due diligence when considering the purchase of a property. When it doubt ask the neighbors will, they will tell you everything.
Wallingford PA Real Estate – Wallingford, PA 19086