Should the seller reveal a house's murderous past?

August 09, 1992|By Christine Evans | Christine Evans,Knight-Ridder Newspapers

MIAMI -- John Moreno loved everything about his new town house nestled in Southwest Dade County's fashionable King's Court community: The big yard, the privacy, the stylish grounds.

Then he found out about the mass murder in the bedroom.

A little something his real estate agent neglected to mention.

"We got to know a few people on the block and finally they confronted us with the fact that six people had been killed in our house," says Mr. Moreno, a 34-year-old seafood importer. "I said, 'You've got to be kidding.' They said, 'No, we're not.' One neighbor had a tape of the television report and his wife got together with my wife, and that was it. My wife was in a panic."

The mystery surrounding the 1981 slaying of the King's Court Six lingers still, but life goes on at the scene of the crime -- now Mr. Moreno's home, much to his chagrin. Like lots of other folks who unwittingly purchase "murder houses," as they are loosely called in the real estate business, Mr. Moreno says he never would have signed on the dotted line had his agent first informed him of the town home's extraordinary past.

But sign he did, becoming one more distressed buyer caught in an emotional debate involving the sale of "stigmatized" or

"psychologically impacted" properties, real estate jargon for a house where something horrible has happened. A proliferation of new laws and nasty lawsuits highlights the legal and ethical -- and sometimes ghostly -- problems that can arise from such transactions.

"Bad luck? Ghosts? I try to stay away from that kind of thinking," Mr. Moreno says. "But I must say, I have woken up and taken a second look now and then."

So have Arne and Corinne Roslund, a Boca Raton, Fla., couple who filed suit against the Coldwell Banker real estate company after buying a $259,900 home that in 1987 was the scene of a particularly gruesome murder-suicide, a historical feature not 11 divulged to the couple until a boy rode by on his bike shouting, "You live in the murder house!" Ditto for Michael Stuve of Hollywood, Fla., who only recently discovered that 16 years ago a woman was shot dead on his patio, an event he thinks might explain why his children "get kind of spooked" now and then.

What happens when a would-be buyer becomes interested in a house that once was the scene of a grisly crime? Or suicide? Should the seller or broker disclose the property's history to the prospective buyer?

The short answer is: It depends. On what state you live in. On what the law says. On the precise circumstances of the crime, death or other unfortunate event.

"It's a big gray area," says Trey Goldman, an attorney for the Florida Association of Realtors (FAR). "Definitely something we'd like to see settled."

The debate began in the early '80s, when an elderly California widow sued a seller and real estate agent for failing to tell her that her new house was the setting for the murders of a mother and four children. Quoting Shakespeare -- "truth will come to light; murder cannot be hid long" -- an appeals court ruled that sellers have a duty to disclose bloody murder if it can be established that it affects the value or desirability of the home. The opinion, of course, left plenty of room for interpretation, which in turn left room for more lawsuits.

As the Roslund case makes headlines on CNN, the Florida association's legal hot line buzzes with calls from members who want to know whether to disclose a home's unsavory past to a prospective buyer: What if a teen-ager committed suicide in the basement? What if a woman shot her abusive husband in the bedroom? What if a child was murdered in the house next door? What if . . ?.

In most cases, FAR recommends disclosure, at least until legislators pass a more definitive bill. For now, Florida case law says simply that a seller must disclose all "material" facts that are not immediately obvious to the buyer and that might affect property value. The question is, What is material?

"It's one thing if your roof leaks," says Mr. Goldman, who generally advises agents to disclose murders just to be on the safe side. "You pretty well know that's important. But let's assume there's a murder on the property. Is that a material fact? Does it affect the value of the property? Well, certainly not like a leaky roof. These things are somewhat subjective."

Indeed, what gravely disturbs one buyer might not raise an eyebrow on another. Gregory Cook, for example, was unfazed by the news that a 15-year-old girl had fatally shot her father, Metro Dade County police sergeant Joseph Lodato, in the Southwest Dade home he bought for $75,000. Mr. Cook, who had been told only that the sergeant had "passed away," knew something was up after he moved in and started receiving bills from a psychiatric hospital where Jennifer Lodato had been sentenced.

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