Haunted Houses and the Law
It’s that time of year again, which means we get to revisit one of our favorite Real Estate cases (not because it’s particularly important, but because it’s particularly funny – and relevant). Today, we discuss Stambovsky v. Ackley.
The facts of the case are interesting, and could happen to you! A gentleman from New York City purchased a home in Nyack. Unbeknownst to this New York gentleman, all the people of Nyack understood that this particular house was inhabited by a poltergeist. The previous owner even advertised the house as being inhabited by the poltergeist in Reader’s Digest and Nyack’s local paper. Our New York friend did not know about any of this. When he discovered the house had a poltergeist, he sought to rescind his purchase agreement and recover his money. The Court heard the case, and decided to have a little bit of fun in their evaluation and response.
The Court begins by invoking the doctrine of estoppel (a fancy way of saying you are barred from making a certain argument) to establish that the house at issue was in fact haunted; because the owner advertised the property as haunted, the Court determined that they couldn’t argue that it wasn’t haunted.
To be clear, sellers aren’t under a duty to disclose the existence of ghosts per se, but they are required to disclose things that will have a material impact on the value of the property. New York, at the time, applied a strict rule of “caveat emptor” (buyer beware) and the buyer didn’t really have a remedy at law – the judge saw the fundamental unfairness here and sadly asked “who you gonna’ call?” going so far as to express that in order to avoid situations like this, buyers would be required to bring a psychic with the Terminix man during home inspections – “the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent and laid quietly to rest.”
Under New York law at the time, a seller was obligated to disclose the existence of a “condition which has been created by the seller materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction.”
The final nail in the coffin, if you will, centers around the duty of a seller to deliver the vacant property to the buyer. Since there was a poltergeist in the property, the Court mused that the seller failed to deliver a vacant property to the buyer. This case is a hoot!
At the Chernov Team we understand that knowledge is power and knowledge of when to disclose the existence of a poltergeist is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.