Before purchasing a home, most people would want to know if it had a crack in the foundation.
Or asbestos in the attic.
Or mold in the walls.
Or if a murder had occurred there.
But while a seller is required under Pennsylvania’s Real Estate Disclosure Law to reveal the first three, a recent court decision affirms buyers are on their own when it comes to finding out if the home they are about to buy has a bloody history.
Pennsylvania law dictates that property sellers must disclose any known information about material defects that may decrease the value of the property. However, while a violent crime may also affect the value of a property, a recent Pennsylvania Superior Court ruling clarified that such an event does not constitute a material defect, and sellers are not required to disclose such information.
In the case in question, a woman purchased a home in Delaware County for $610,000. Shortly after moving in, she learned from a neighbor that a murder-suicide had occurred in the house. The woman sued both the sellers and the real estate broker for fraud and negligent misrepresentation.
The buyer alleged that the murder-suicide constituted a material defect because it decreased the value of the property. Therefore, the seller should have been required to disclose the information prior to the sale under the Pennsylvania Real Estate Disclosure Law. The trial court disagreed with her and entered summary judgment in favor of the sellers. On appeal, the Pennsylvania Superior Court reversed the lower court’s decision, and sent the case back to be tried again in the trial court, this time with a jury.
The matter was reargued before the Superior Court, which reversed its earlier ruling. The court noted that the Pennsylvania Real Estate Disclosure Law sets forth a list of 16 specific material defects that require disclosure by the seller, each of which is related to the physical structure of the building or the condition of the surrounding property. The court said that the fact that a murder-suicide occurred on the property is at most a psychological defect and that the language of the Law plainly establishes that the legislature did not intend to cover psychological defects.
While many home buyers may wish to know the history of their potential home, requiring sellers to disclose events that had taken place on a property would create a slippery slope. What would be next – disclosure of burglaries in the neighborhood? Natural or accidental deaths on the property? And what length of time must pass before events would no longer have to be disclosed? 1 year? 10 years?
The ruling underscores that sellers don’t have to disclose every negative thing about a property – just what Pennsylvania law specifically says are material defects. The onus is on the buyer to be aggressive in discovering any other desired information about the condition and history of the property.
Thus, while Pennsylvania’s the Pennsylvania Real Estate Disclosure Law provide buyers with a certain degree of protection from serious defects, the classic real estate principal of caveat emptor still prevails: let the buyer beware.
Frank Kosir, Jr. is a real estate attorney at the Pittsburgh-based law firm of Meyer, Unkovic & Scott. He can be reached at firstname.lastname@example.org.