Selling Homes of AIDS Victims: Agents Face a Dilemma : Issues of Discrimination, Privacy Create Tough Problem

When a Laguna Beach man died of AIDS and his brother tried to sell the house recently, he ran into a problem.

The real estate agent said she had been advised by legal counsel that the cause of the brother’s death should be disclosed to prospective buyers.

After weeks of legal research, the brother and other family members have given a firm refusal.

“Our position is, it’s nobody’s goddamn business, and we won’t allow it,” said Santa Ana attorney Per Trebler, who is representing the victim’s brother.

For some California real estate agents, the question of whether to disclose that a property belonged to a victim of acquired immune deficiency syndrome has become increasingly troublesome. On one hand, some cities ban discrimination against AIDS victims, and others against homosexuals. On the other, a 1984 state Supreme Court decision requires that real estate agents disclose anything a buyer might consider a defect.

A Los Angeles real estate firm recently asked the UCLA School of Medicine for information about what buyers should do to clean the home of an AIDS victim. Earlier this year, a San Francisco buyer sued two sellers and the real estate agents involved, claiming they should have told her one of the sellers had a fatal disease, which she suspected was AIDS.

“We’ve had maybe a dozen inquiries of one kind or another about AIDS from realtors,” said Steve Groom, counsel for the California Assn. of Realtors, based in Los Angeles. “But a year ago, we didn’t have any.”

More than a dozen real estate agents interviewed in Orange County agreed that if they knew an AIDS patient had lived in a house, they would tell prospective buyers unless real estate association attorneys advised them to do otherwise.

Others, however, see that response as discriminatory. Warner Kuhn, director of AIDS Response for the Gay and Lesbian Community Services Center of Orange County, calls such disclosures “the ultimate indignity” to AIDS victims.

Disclosures give “validity to the myth that you somehow catch AIDS by living in the home of an AIDS victim,” Kuhn said. “Real estate agents who think they have to bring up the AIDS issue in such cases do so out of ignorance about what AIDS is.”

Laguna Beach City Councilman Robert Gentry calls the agents’ response “AIDS phobia,” and says it is “another example of totally unwarranted fear that AIDS can be transmitted from one family to another.”

The real estate agent who raised the issue in the Laguna Beach case, Janet Owens of the Chateau Co. of that city, refused to comment. She said, however, that she sought advice from the California Assn. of Realtors through its legal advice hot line.

Trebler said Owens told him she was advised to disclose the AIDS information.

Groom, counsel for the state realtors’ group, said he is familiar with the Laguna Beach case but could not discuss it, citing attorney-client privilege. He did say, though, that real estate agents should disclose “any material facts about that property . . . . I would venture that most purchasers would deem (an occupant with AIDS) a material fact and that it should be disclosed to them.”

Nearly three-fourths of the AIDS cases reported in the United States involve sexually active homosexual or bisexual men with histories of multiple partners, according to the U.S. Department of Health and Human Services. With a few exceptions, the rest involve intravenous drug users.

An AIDS fact sheet published by the federal government states: “No cases have been found where AIDS has been transmitted by casual household contact with AIDS patients.”

Jeanette Shelly, AIDS project coordinator for the Orange County Health Care Agency, said she has sent fact sheets about basic hygiene to those who have asked about steps to take while caring for someone with AIDS.

“There is no risk,” she said of the possibility of contracting AIDS from casual contact. “We only send it out to put people’s minds at ease,” she added.

Despite these medical arguments, the real estate agents said, they feel strongly that buyers should be told.

“There is still too much we don’t know about AIDS,” said an agent who has been selling real estate in Laguna Beach for more than 20 years. “If I know a seller has AIDS, you bet I’m going to disclose it. I don’t care what the seller says.” The agent requested anonymity.

Gary Lahr, president of the Saddleback Valley Board of Realtors, strongly favors disclosing the information, contending that real estate agents are “legally bound to disclose anything which adversely affects the desirability or value or the property.”

“It’s not up to me to decide whether AIDS is an issue. That’s up to the buyer,” Lahr said. “The buyer has the right to know, just like he has the right to know if a suicide had occurred in the house, or a murder.”

Some real estate agents pointed to the state Supreme Court decision in Easton v. Strassberger, in which a real estate agent was held liable because he failed to disclose a property’s defects even though he was not aware of them. The court held that there were enough indications to prompt the real estate agent to make his own inquiry about the defects.

“Easton doesn’t apply in AIDS cases, legally, because there are no warning signs available that the seller had AIDS,” Groom said. “But in reality, Easton has probably made a lot of realtors gun-shy that they’ve got to disclose everything possible.”

Groom said his office cannot offer a blanket position. One reason, he said, is that a number of cities have ordinances prohibiting discrimination against AIDS victims. In addition, many cities also prohibit discrimination against homosexuals.

“That complicates the issue,” Groom said. “In those areas, disclosure could be interpreted as illegally discriminatory.”

Discrimination Prohibited

Laguna Beach has an ordinance prohibiting discrimination against homosexuals. Gentry speculated that if the real estate question becomes a bigger problem, the ordinance might be invoked to prevent such disclosures.

One buyer who believes the discrimination issue must be secondary is Jayne Roberts, a lawyer, who sued two male sellers in San Francisco.

After paying a $10,000 deposit on a house, Roberts discovered on a visit there that both owners were ill, and one appeared near death. She suspected that at least one of them had AIDS, and she wanted her money back. The owners refused. One of the owners died soon afterward of hepatitis, a common cause of death for AIDS victims. The lawsuit was settled when the sellers agreed to let Roberts out of the contract if she would forfeit the $10,000 deposit.

“I don’t buy it that the experts all agree you can’t catch AIDS, or any other serious communicable disease, by moving into the victim’s house,” she said. “I’ve got six kids; my pediatrician told me I’d be crazy to move into that house.”

Roberts also sued both real estate agents involved, contending that they had an obligation to tell her that one owner was seriously ill “from a fatal and infectious disease,” as her lawsuit stated.

“I am very sensitive to discrimination against gays and AIDS victims,” Roberts said. “But we’re talking about the health of my family; that’s more important to me.”

‘Realtor Has Obligation’

One of the attorneys in the case, Martha Caron, who represented Coldwell Banker Real Estate Services, one of the brokers Roberts sued, says she agrees with much of what Roberts says. In this case, Caron said, neither real estate agent knew about the owner’s illness. But if real estate agents know, they should tell, Caron said.

“Even if the seller stands right there and says don’t do it, the realtor has an obligation to tell the buyer what’s going on,” Caron said. “Either that or withdraw from the listing.”

If it comes to that, the family of the Laguna Beach man will insist that the agent withdraw.

The Laguna Beach house was taken off the market temporarily while the victim’s brother was being appointed executor. But Trebler said that when it goes on the market again, whether Owens or another agent is selling it, that agent will be allowed to discuss the AIDS issue.

If a new real estate agent is hired and does not know about the former occupant’s illness, the issue will be moot, Trebler said.

For his clients, Trebler said, the issues are privacy and discrimination.

“I’ve got clients with guts and brains, and a lot of principle,” Trebler said. “The (AIDS) condition is not going to affect anybody, and it’s not going to infect anybody.”