What is a Stigmatized Property? | Laws for all 50 States
Would you be uncomfortable living in a home where someone recently died? If so, you’re not alone! Around 26% of participants in a Realtor.com survey indicated that would not live in a home where someone died. Someone dying in a home is a very common example of an event which stigmatizes a property.
What is a stigmatized property?
Stigmatized properties are homes that some buyers find undesirable due to emotional or psychological reasons. Typically, homes are stigmatized when emotionally upsetting events such as murder, suicide, and sexual assaults occur on or near the property. A home that is alleged to be haunted or contain paranormal activity is likewise considered to be stigmatized. Stigmatized homes are said to be “psychologically impacted” and some people refused to reside within them under any circumstances.
Stigmatized properties often times have trouble finding a buyer, especially homes that were involved in a widely-publicized and sensational event. A study by Write State University found that stigmatized homes sold for 3% less and take 45% longer to sell when compared to “untainted” homes.
Popular remedies used when trying to mitigate the stigma of a home include extensive remodeling or changing the address. Sometimes, properties are so heavily stigmatized that they are demolished entirely. Such was the case with OJ Simpson’s home in Los Angeles and the Sandy Hook Elementary School in Newtown, Connecticut.
There can be an immense opportunity for those who can live in a home where a tragedy occurred because of the potential discount. The more widely-known the stigma becomes, the steeper the discount the home will sell for. Take for example a story where a San Francisco home was listed at a 20% discount because of a tragic fire four years prior which killed three members of a household, including a one-year old daughter and her father.
Types of stigmatized properties
1. Murder or Suicide Stigma
This stigma exists when someone is murdered or if someone commits suicide within the home. A murder or suicide stigma tends to be the worst stigma for many buyers, because a lot of people believe that trauma can linger after someone has died in a home. According to a survey commissioned by the Huffington Post, around 45% of Americans believe that “ghosts, or that the spirits of dead people can come back in certain places”.
The vast majority of states do not require the disclosure of a previous murder or suicide within a home. However, a sellers cannot knowingly mislead a buyer when asked about such an event.
2. Public Intrigue Stigma
Sometimes, a home can be of such public intrigue that gawkers become a nuisance to the homeowner. A great example is the Albuquerque home that was used as Walter White’s home in the television series Breaking Bad. Tourist and fans of the show created disruptions which made the homeowners “fearful to leave the property unattended”. The homeowners had to install a metal fence to keep people out!
Public stigma can also be an issue when the home was the site of a sensational crime. Homeowners of stigmatized properties are commonly annoyed by the constant barrage of insensitive lookie-loos slowly driving by their property and snapping photos. Even worse, they may attempt to trespass due to their morbid curiosity.
3. Paranormal Activity Stigma
For those who believe in ghosts or spirits, a house that inhabits perceived paranormal activity can be a dealbreaker. The previously mentioned Realtor.com survey found that 49% percent would not consider moving into a haunted home, even if they were able to obtain a discount or a better home!
However, don’t count on the sellers revealing it themselves. There is no state that explicitly requires paranormal activity to be disclosed. Curiously, states like Massachusetts, Iowa, and Minnesota have specific mentions that a seller need not disclose “parapsychological or supernatural phenomenon”. These are probably the only instances where references to haunted houses are codified into law!
4. Criminal Stigma
Some buyers care if a home was used during the commission of a crime. For example, if the home was formerly utilized to produce or sell drugs. Most states do not require the disclosure of past criminal activity unless it pertains to the production of methamphetamine, which can lead to certain health complications.
5. Debt Stigma
Sometimes, a new homeowner may be hounded by debt collectors trying to contact the previous homeowner. In this event, the home has a “debt stigma” because future owners may have to unfairly deal with debt collectors.
6. Minimal Stigma
Minimal stigma is something that only bothers a small percentage of the population. An example of this is someone who died of a terminal illness within the home. Even though the illness isn’t communicable, a buyer could be irrationally scared of living within the home. Another example could be buyers being upset by a sex offender living nearby.
What must be disclosed?
Most states do not require the seller to disclose any events which may have stigmatized a property. Some states require a death to be disclosed if was due to the condition of the home, such as if someone dies of a carbon monoxide leak.
The National Association of Realtors states that their members should voluntarily disclose any facts which “could affect a reasonable purchaser’s decision to purchase”. Would an elderly occupant dying in their sleep 10 years ago be a fact which would reasonably prevent someone from purchasing a home? Probably not. Would the home being the site of a recent mass murder affect someone’s decision to purchase? Probably!
It’s important to note that a seller or real estate agent cannot lie when asked about stigmatizing facts or else they would be liable for fraud. This means you should ask about stigmas if they are important to you. You may be able to gain some insights that you couldn’t have discovered on your own.
Believe it or not, but there are some facts pertaining to stigmatized properties that cannot be disclosed. For example, federal law prohibits the disclosure of a death due to AIDS. Any real estate agent asked such a question should answer that they are unable to answer that question.
Stigmatized Property Laws by State
The above map represents which states require the disclosure of a recent death when selling a home. Below you will find a complete list of each state’s specific laws regarding stigmatized properties.
Alabama is a caveat emptor state, meaning that sellers are not required to disclose any defects to buyers. This means that it’s the buyers’ responsibility to uncover any sort of past deaths or psychologically damaging facts about the property.
In Alaska, the listing agent must disclose if they know a murder or suicide occurred on the property within the last year. The agent is not liable if they did not know that a murder or suicide took place. Reference: Statue 08.88.615 c.1-2
Arkansas considers any information that “psychologically impacts” a property to be a non-material act with no requirement of disclosure. This includes any information about nearby sex offenders. Reference: Code 17-10-101.
California requires the owner of a home to disclose if an occupant of their home has died in their house in past three years. No other state comes close to such a mandate, most that require a disclosure have it only apply within the past year. Reference: Civil Code 1710.2.
Facts pertaining to events which could “psychologically impact or stigmatize” a property are not subject to disclosure in Colorado. This includes murder, suicide, and any other felony which may have taken place. Reference: Statute 38-35.5-101.
Connecticut considers any felony or death that has occurred on a property to be a nonmaterial fact that does not need to be disclosed. Reference: Statute 20-329cc-ff
Delaware law doesn’t make the seller disclose any facts surrounding a property which have a psychological impact. However, if a buyer makes a written request for such information the seller and their agent must respond with accurate information to the best of their knowledge. Reference: Code 2927
The State of Florida does not require sellers to disclose that their home was the site of a homicide, suicide, or death. Reference: Statue 689.25
Georgia doesn’t require a homeowner to disclose any death or crime that took place on their property when selling their home. However, the homeowner is required to be truthful if a potential buyer inquiries about it. Reference: Code 44-1-16
In Hawaii, the seller does not have to disclose an event or circumstance which “had no effect on the physical structure or the physical environment”. This would cover any fact that stigmatized a property. Reference: Statute 508D-8
Idaho does not require that any psychologically impacting facts be disclosed. This includes murder, suicide, criminal activity, or even nearby sex offenders. Reference: Statute 55-2801
The State of Illinois does not require that any non-physical defects be disclosed about a home. This would include anything that stigmatizes the property. Reference: Statue 454/15-25
Indiana does not require the disclosure of “any knowledge of a psychologically affected property” by a seller. However, disclosure is required if the home was used to manufacture methamphetamine. Reference: Code 32-21-6
In Iowa, there is no obligation to disclose any murders, haunting, paranormal activity, suicide, or any other sort of psychologically distressing event. It is the responsibility of buyers to discover these facts. Reference: Code 558A.4
Curiously, Kansas has no law on the books regarding stigmatized properties. However, the Kansas Association of REALTORS recommends that any event be disclosed so that sellers avoid a potential lawsuit later on.
In Kentucky, sellers and real estate agents are not required to disclose any sort of stigmatizing facts pertaining to a property. However, they must be truthful should they be asked about such facts. Reference: Statute 324.162
Louisiana does not require home sellers to disclose any stigmatizing facts about a property, such as if a murder or suicide occurred on the premises.
Maine has no law pertaining to stigmatized properties. Even if an agent were to know about any emotionally disturbing facts about the property, they would need written permission from the seller in order to disclose them.
Maryland’s laws state that a real estate agent cannot be held liable for not disclosing “a homicide, suicide, accidental death, natural death, or felony” that took place at the property because they are not considered material facts. Reference: Code 17-322.1
Massachusetts finds that any sort of psychologically disturbing facts about a property are not material facts and therefore do not have to be disclosed. These include any sort of murder or crime on the property as well as “alleged parapsychological or supernatural phenomenon”. Reference: MA Law Part 1, Title XV, Chapter 93, Section 114
Under Michigan law, the seller or listing agent has no duty to disclose any fact “which had no material effect on the condition of the real property”. The law specifically cites murder, suicide, and nearby sex offenders as such examples. Reference: Section 339.2518
Minnesota does not require a seller to disclose any stigmatizing facts about their property, including any natural or non-natural death that occurred or perceived paranormal activity. Reference: Statute 513.56
Missouri finds that any “psychologically impacting” events that occurred on a property are not material facts. This includes property that was the site of a homicide, felony, or suicide. Reference: Statute 442.600
Montana law excludes precludes “suicides or felonies” from being material facts, meaning an agent is not required to disclose them. Reference: Code 37-51-102
There is no law in Nebraska specifically relating to stigmatized properties. This ambiguity may leave sellers liable if they don’t disclose such facts.
Nevada does not consider any death or crime occurring on or near a property to be a material fact that must be disclosed. The same applies to any sex offenders who may have resided within the home or live nearby. Reference: NRS 40.770
There’s no requirement to disclose a murder, felony, or suicide that occurred on a property in New Hampshire. Reference: Section 477:4-e
In New Jersey, a real estate agent is not required to disclose any psychologically disturbing facts about a home. However, the New Jersey Supreme Court found that a real estate agent would be required to disclose such a fact it if it “so intertwined with a physical condition of the property that it must be disclosed”. An example of this would be if someone died in a home due to toxic mold. The occupant died due to the condition of the property, and therefore that death must be disclosed. Also, real estate agents must be truthful when asked about any deaths that occurred on the property. Reference: 11:5-6.7
New Mexico finds that a seller or homeowner is not required to disclose that their house was the site of any death or crime. Reference: NM Stat § 47-13-2
In the State of New York, they do not require that any death, crime, or stigmatizing feature of a property be disclosed. Reference: Section 443-A
North Carolina keeps it simple: “death, illness, or conviction of certain crimes is not a material fact”. Reference: § 39-50
North Dakota is a “buyer beware” state, meaning that any facts pertaining to stigmatized events are not required to be disclosed. Additionally, an agent can only provide disclosure of such facts that the seller authorizes.
Ohio law has no law addressing stigmatizing events which may have occurred on or near a property. However, it’s recommended that sellers still disclose any such facts because a buyer could try to claim in court that it’s a material defect.
Oklahoma finds that any fact which stigmatizes a property (such as a murder or suicide) is not a material fact and does not have to be disclosed. Reference: §59-858-513
Oregon considers any fact which “does not adversely affect the physical condition” of a home is not required to be disclosed. There’s specific language that includes deaths and violent crimes into that definition. Reference: Statute 93.275
The Pennsylvania Supreme Court found in the case Milliken v Jacono that they were unwilling to accept that “psychological stigma...constitutes a material defect”. Therefore, real estate agents and their seller clients do not have to disclose such facts.
In Rhode Island, any psychologically disturbing fact is not a material fact and are not required to be disclosed. This includes any crimes or murders having taken place on or near a property. Reference: Section 5-20.8-6
An agent or a homeowner cannot be held liable for not disclose any facts that are psychologically stigmatizing. Reference: Section 27-50-90
The Sellers Disclosure Statement in South Dakota requires that sellers disclose whether there was any homicide, suicide, or felony that occurred on the property in the past 12 months. Reference: Law 43-4-44
Tennessee does not require that sellers disclose any facts which have “no effect on the physical structure of the real property”, including any deaths or suicides which occurred on the property. Reference: Code 66-5-207
Texas law makes it clear that Realtors and their clients do not have a duty to disclose any facts which are “unrelated to the condition of the property”. This includes any deaths or crimes that took place on a property. Reference: Code 5.008
Utah real estate agents and homeowners have no requirement to disclose that the “property being offered for sale is stigmatized”. Reference: Code 57-1-37
There’s no explicit language in the law regarding stigmatized properties. However, there is a requirement that real estate agents disclose “facts a licensee reasonably believes may directly impact the future use or value of the property”. A buyer could use this language to try to make an argument in court that a stigma (like a murder having taken place in the home) impacts the future value of the home.
Virginia’s laws do not require a homeowner to disclose non-physical facts about the property, including any deaths or murders. Reference: Code 55-52
Washington State has no requirements that real estate agents must disclose any stigmatizing events which occurred on a property, this includes any nearby sex offenders. Reference: RCW 64.06.021
There are no laws on the books regarding stigmatized properties in West Virginia.
Wisconsin is a buyer beware state, meaning it’s the buyers’ responsibility to determine any facts which may impact the value of the home. However, the seller cannot knowingly mislead potential buyers about particular facts.
The Property Disclosure statement in Washington D.C. does not mention if you have to disclose stigmatizing facts.