Psychological Stigma From Crime Can Mean No Sale

Real estate agent Nigel Taylor has a property with an image problem. A brutal murder occurred in a house he is trying to sell.

In the business, it’s called psychological stigma, and sellers don’t necessarily have to tell you about it, although Taylor said complete disclosure is the standing order at the company he works for.

“You show the property and if they make an offer, then you make the disclosure as part of your acceptance,” he said. “It’s a condition like available financing or a physical inspection.”

Daryl Roberts owns a house in Ventura where a man and his wife were bludgeoned to death with a fireplace log.

“A few of our neighbors said, ‘Oh, yeah, you’re in the house where the murder was,’ ” Roberts recalled. “The seller told us that as part of their acceptance of our offer, even though it was beyond the statutory time limit.”

The seller usually doesn’t have to tell the buyer about events that happened more then three years earlier, said Larry Alamao, a lawyer at the California Department of Real Estate.

Alamao said the rules regarding psychological stigma were defined in a 1983 case involving a house that had been the site of a multiple murder. After moving in, the buyer learned from neighbors that previous prospective buyers had not wanted the house because of the crimes committed there.

“The court agreed with the buyer not because the murder offended sensibilities,” Alamao said, “but because the event had notoriety that might have affected the value of the property.”

Run-of-the-mill deaths don’t generally meet the legal standard of materially affecting the value of the property, Alamao said.

Dorothea Montalvo Puente, the Sacramento landlady who killed her boarders and buried the bodies in the garden, would meet the standard. A suicide usually doesn’t.

A Chinese couple in San Francisco bought a home in 1989 and later learned that the previous owner’s son-in-law killed himself there. They sued because some Chinese believe that a death on any property may bring bad luck.

It did bring bad luck. They lost their case because the judge said the sellers had no way of knowing about the Chinese taboo.

“While the sellers of the property are required to disclose known defects and truthfully respond to the buyer’s inquiries,” the judge said, “they are not required to be mind readers.”