Legal issues about Real Estate

[Robert A Whit]

I was today reading an article where a home in PA was sold to a buyer and that buyer resold it for a profit. Anyway, the next buyer bought tit several years back. The problem you may ask is what?

Seems two owners back, the man killed his wife in the home and killed himself.

Who would want to know this prior to buying the home?

I have wondered if anybody would like to ask me questions and get answers to various real estate issues?

Anyway, this is the first case. I will show you the article from PA and then show ou wnat CA law says.

Some of you may wish to try to get your own state laws to do as CA does.

So, what do you think? Are you interested?

Pa. Homeowner Sues Seller Over Home's Bloody Past

By SUSANNA KIM | ABC News – 14 hrs ago








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ABC News - Pa. Homeowner Sues Seller Over Home's Bloody Past (ABC News)


A Pennsylvania woman has appealed to the state Supreme Court in her suit against a home seller and real estate agent who failed to disclose that a murder-suicide had taken place in the home she purchased.
When Janet Milliken, 59, moved from California after her husband died, she had hoped to start a new life with her two teenage children in Pennsylvania near her family.
She bought a home in Thornton, Pa., for $610,000 in June 2007. She learned a few weeks after she moved in from a next-door neighbor that a murder-suicide had occurred the year before in her home.
She sued the seller and the real estate agent for fraud and misrepresentation, saying they made a "deliberate choice not to disclose the home's recent past," according to a court document.
The trial judge granted summary judgment in favor of the defendants, saying state law does not require agents to disclose such events.
Then in December 2012, a panel of the state appeals court affirmed that decision, though with a nearly split decision.
The matter dates back to Feb. 11. 2006, when a previous homeowner, Konstantinos Koumboulis, allegedly shot and killed his wife, then shot himself in the master bedroom.
Joseph and Kathleen Jacono had bought the home Oct. 31, 2006, knowing of the murder-suicide, for $450,000. They later sold it to Milliken, who wants the transaction rescinded and her money back.
Filing a petition to the Supreme Court of Pennsylvania last week with the hope of arguing the case further, the attorney for Milliken, Tim Rayne, said they "hope to have Pennsylvania recognize that having a horrific event occur within a property can be just as damaging and troubling to a future homeowner as a physical defect, or perhaps even more so."
"Having a gunshot murder-suicide committed within the home is much more devastating than having a small leak concealed by the previous homeowner," Rayne said. "Physical defects can be fixed. Troubling events that could and did occur in this home could never go away."
Rayne said sellers should be required to disclose troubling events "at least for some period of time."
Abraham Reich, the attorney for the Jaconos and their agent with Re/Max, said, "The majority, en banc [full-court] opinion of the Superior Court was well reasoned and consistent with years of industry practice in Pennsylvania.
"While the issue is interesting, the number of times it comes up does not warrant Supreme Court review," Reich said. "The Superior Court opinion provides guidance for any real estate transaction in the future and puts to rest the uncertainty of whether a seller has a duty to disclose a murder-suicide or any other type 'psychological damage.' In my opinion, the result is a good one."
Rayne said Milliken, 59, was "disturbed" when she learned of her home's history from a neighbor. "As she was struggling what and if to tell the kids," he said, her children's friends visited the home for Halloween and told the children about the murder-suicide.
"They were very upset upon learning about it and disturbed about the whole situation," Rayne said.
"They were dealing with the death of a father and husband and wanted to move closer to family, and then this happened to them," he said. "It was a tragedy all around."
Rayne said Milliken and her children are still living in the home. He said they would prefer to move out of the home but can't afford to do so without selling it.
"They feel that if they sold it, through good conscience they would have to disclose," Rayne said, "so it would negatively impact the value."

Disclosure involves coming clean about an issue regarding the property that might adversely affect its value or sale. It's commonly associated with structural issues, such as lead-based paint or a cracked foundation. The legal term for what sellers and lessors must disclose is "material," as in "material facts" or "material defects." Material means that if you knew about the fact or defect, you would no longer want the property, or – at the very least – you wouldn't be willing to pay as much for it.

Three-Year Rule

Under California Civil Code Section 1710.2, if someone dies on the property, it's a material defect – but only if the death occurred within three years of the date you make an offer to purchase or rent the home. Technically, if the property was the location of a mass murder in 1975, the seller, lessor, agent or broker does not legally have to volunteer the information.

Exceptions

CCCS 1710.2 makes an exception for deaths caused by acquired immune deficiency syndrome. Federal law classifies AIDS as a disability, so disclosure of someone's death due to this cause is considered discriminatory. California law also provides that if you actually ask the seller or lessor about deaths that may have occurred on the property, the owner can't lie. The California Association of Realtors recommends that their agents come clean if questioned, no matter how long ago the death occurred. This doesn't hold true for AIDS-related deaths, however.

Penalties

You have recourse if you purchase or rent the property, move in, then find out later that someone died in your home within the last three years. California allows you to file a lawsuit against the seller, lessor, his agent or broker – or even your own agent or broker broker – for failure to disclose. Typically, these lawsuits seek recompense for the difference in price between what you purchased or leased the property for, and what it would have been worth if the seller had disclosed the death. The problem, of course, is that a material defect such as a death isn't as quantifiable as one that concerns a physical defect. This isn't to say that you can't identify what the property might have been worth had the death been disclosed, but you may need the help of a professional.

[red states rule]

I fail to see the problem in all this. It is not like the murder caused structural damage to the property. Also since she has been fighting this is court for so many years, I wonder how much money she would be saving if she had applied the legal costs to the outstanding principal of the loan

[logroller]

I fail to see the problem in all this. It is not like the murder caused structural damage to the property. Also since she has been fighting this is court for so many years, I wonder how much money she would be saving if she had applied the legal costs to the outstanding principal of the loan

If the property was sold to the first buyer at a discount due to the recent history, then it could be argued that it was material; else, why was the home price lower before? Seems a simple comparison with like home sales could establish rather there was a discount given.

[fj1200]

If the property was sold to the first buyer at a discount due to the recent history, then it could be argued that it was material; else, why was the home price lower before? Seems a simple comparison with like home sales could establish rather there was a discount given.

State law determines 'material.' At this point the state hasn't defined it to be and the courts have ruled accordingly. Nothing more to do than complain that they bought a house at the top of the market.

Her best action IMO would be to sue their buyer's agent to determine if they failed in their duty in representation. That also hinges on state law.