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Stigmatized property
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Stigmatized property is a term used in the real estate business which describes possible detrimental features of a property or home, all the result of unfortunate occurrences. These can include murder, suicide or even AIDS, in addition to a belief that a house may be haunted.
Famous homes, such as those used in television or movies, can also be stigmatized due to increased traffic from fans wanting to see the house in person.
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Encyclopedia
Stigmatized property is a term used in the real estate business which describes possible detrimental features of a property or home, all the result of unfortunate occurrences. These can include murder, suicide or even AIDS, in addition to a belief that a house may be haunted.
Famous homes, such as those used in television or movies, can also be stigmatized due to increased traffic from fans wanting to see the house in person. One such home is the house that was made famous in the film The Amityville Horror. The house which was located at 112 Ocean Avenue in Amityville, New York was the site where Ronald DeFeo, Jr. murdered his family, and a little over a year later the Lutz family claimed that evil spirits drove them from their home. Since the film's release, the house has been renovated and the address changed in an attempt to prevent sightseers from disturbing the neighborhood.
Even though a particular buyer may not care about any stigma attached to the property, the stigma may make it very difficult to resell in the future. Therefore, while a buyer may or may not believe in supernatural phenomena, he/she may want to know about a property's bloody past.
Legal Status of Stigmatized Property
At least in the United States, the premise of Caveat emptor or "let the buyer beware" was held for many years as the law for sales transactions. As the idea of an implied warranty of habitability began to find purchase, however, issues like the stigma attached to a property based on acts, "haunting", or criminal activity began to become important. As the housing market began taking on greater importance in the lives of people who began to see their houses as investment vehicles rather than permanent dwellings, the loss in value on resale due to stigma became measurable and quantifiable.
The court arguments involved in Stambovsky v. Ackley summed up the idea of stigmatized property. Seen by the New York Supreme Court, it reached the conclusion that since the house the plaintiff bought was "widely known" to be "haunted", he was therefore estopped to deny such rumors. Since it would affect the ability of the plaintiff to resell the house just as much as a cracked foundation or sub-standard roof would, the court found that such stigma must be openly disclsosed.
Several states have created specific statutes in the US for what must and must not be disclosed in terms of the stigma, but there is no federal level mandate yet.
Forms of Stigmatized Property
Many jurisdictions recognize several forms of stigmatized property, and have passed resolutions or statutes to deal with them. One issue that separates them is disclosure. However, depending on the jurisdiction of the house, the seller may not be required to disclose the full facts. Some specific types must always be disclosed, others are up to the jurisdiction, and still others up to the realtor.
The types include:
- public stigma : when the stigma is known to a wide selection of the population and any reasonable person can be expected to know of it. The example given above of the house used in the Amityville Horror is a good example, but another example would be the home of the Menendez brothers. Public stigma must always be disclosed, in almost all American and European countries.
- criminal stigma: the fact that the property was used in the ongoing commission of a crime. For example, houses that were chop shops, drug dens, brothels, or other heavily criminalized properties are stigmatized due to their association with criminals. In the case of drug dens, some drug addicts may inadvertently come to the address expecting to purchase illegal drugs. Most jurisdictions require full disclosure of this sort of element.
- HIV stigma: While some people who are ignorant of how HIV or AIDS is transmitted may wish to know if the previous inhabitants had HIV or AIDS, most jurisdictions do not require this disclosure and most realtors will simply refuse to answer it, suggesting that they do not know the status. Refusing to list a property due to the owner having HIV is not illegal, but is unlikely to be appreciated.
- Murder/Suicide stigma: Most jurisdictions require realtors to reveal if murder or suicide occurred in the house.
- Debt stigma: When debtors move out of a house, they leave a legacy of subjecting subsequent occupiers to harassment by collectors.
- Phenomena stigma: Houses that are renowned for being "haunted", have ghost sightings, etc are required to be revealed by many (but not all) jurisdictions. This is in a separate category from public stigma in situations where the knowledge that the house is "haunted" is restricted to a local market.
The idea of "minimal stigma" -- where only a small, select group hold that a house is stigmatized and the likelihood of such a stigma affecting a seller's ability to sell the property, is almost universally rejected. Realtors may disclose this information as they see fit.
See also
External links
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- : Even celebrities lose when a home is stigmatized.
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