As the weather turns colder, the leaves turn orange, and pumpkins start appearing on every doorstep, a lot of people in Chicago turn their minds toward one thing: Halloween.
This October holiday means a lot of different things, to a lot of different people. For some, it means the chance to feast on all the candy that they normally wouldn’t get to touch at other times of the year. For others, it means an excuse to dress up as their favorite Harry Potter character or the big meme of the moment. And for plenty of other people, the Halloween season means thinking about ghouls, goblins, and ghosts.
For home buyers and sellers, in Illinois and elsewhere, it’s actually not uncommon to think about ghosts at other times of the year, too. Maybe you have experience with this yourself. Countless house hunters walk onto a property and immediately start to question if the creepy old property may be haunted. Some sellers fret about whether or not they should disclose that they once heard the inexplicable sound of rattling chains coming from the backyard.
So, all this brings up a question, perfect for the Halloween season:
Here in Chicago, is it necessary to disclose if a property is haunted?
Like discovering the cause of a haunting itself, the answers aren’t always cut and dry. Here in Illinois, experts tend to agree that sellers do not necessarily have to disclose if they suspect paranormal activity.
As the Illinois Association of REALTORS explains in a blog post, the Illinois Real Estate License Act, Section 15-20, indicates that “licensees have no legal duty to disclose facts that have no direct and detrimental physical impact on the property.”
The reality, as one expert explains for the IAR, is that “stigmas are subjective,” so “what is a problem for one buyer might not be an issue for another buyer.” Therefore, listing brokers and sellers “would not have a legal duty to disclose that someone believes the house is haunted.”
Similarly, as this (highly entertaining) 2016 post brought to our attention by the American Bar Association points out, Illinois disclosure statutes require the reveal “of certain physical defects at the property, but [do] not mention any psychological or paranormal activity.”
With all this being said, it’s important to realize that laws will vary from state to state on this. Beyond Illinois, some states have stricter guidelines about the disclosure of psychological factors that could result in a property being stigmatized.
The Curious Case of Stambovsky v. Ackley
There is also legal precedent of a haunting being sufficient grounds for a buyer to back out of a sale and get their money back. The precedent comes from the decision in Stambovsky v. Ackley, a famous (or, perhaps, infamous) case out of New York state.
In broad strokes, here’s what you need to know, per NOLO. Stambovsky purchased a home in Nyack, New York. What the previous owner, Helen Ackley, failed to report was that she had previously encountered numerous spirits on the property. Once Stambovsky heard of the hauntings, he wanted to back out of the sale, and he ended up taking Ackley and her real estate agent to court for fraudulent misrepresentation.
Ultimately, the appellate court ruled that, because Ackley had previously sold stories of the haunting to Reader’s Digest, and reported them to the local press, she was “estopped to deny their existence” and, “as a matter of law,” the house would be considered haunted. Stambovsky was then allowed to get out of the $650,000 purchase.
Besides being a fun story to bring up the next time you want to argue that ghosts are real, Stambovsky v. Ackley sets a good rule of thumb. As the IAR puts it: “depending on the situation, sellers might elect to disclose a stigma even if there is no legal duty.” This could help sellers to avoid a thorny situation down the road, while also helping prevent a situation where the buyer gets wind of ghostly happening from gossipy neighbors.
Can a Haunted Home Even Sell?
And, finally, sellers might want to keep in mind that an apparition or two might not be so bad for business. Findings from U.S. News & World Report indicate that roughly a third of all Americans would be open to living in a home with a ghost. Similarly, Forbes notes that, in a survey, “28% of respondents think that they have lived in a haunted home and 14% think that they may have.”
Want to talk all things Chicagoland real estate law with your local pros? The Gunderson Law Firm is here. Whether you want to talk spirits, or things like:
- Residential Real Estate
- Commercial Real Estate
- Purchases and Sales
- 1031 Tax-Free Exchanges
- Mortgage Conveyancing & Advice
- Real Estate Litigation
- Title Insurance
- Title Examinations & Disputes
- Asset Protection / Trusts
- Estate Planning / Wills
- Reverse Mortgages
- Property Development
- Condominium Law
… don’t hesitate to drop our team a line today to keep the conversation going, or set up your free initial consultation.