Question:
The house across the street is up for sale. It is listed with a real estate agent. I know that the house was a “murder scene” almost 35 years ago. The property is currently rented and I’m sure that the tenants don’t know. Should I call the Listing Agent? Is this something that needs to be disclosed?
Answer:
There are certainly several issues here. The Seller has no obligation to disclose. However, the Seller’s agent might. Let’s assume that with violent deaths like this, there is a “murder discount” even if that took place several years ago. If I am acting for the Buyer, I want to get a credit for the murder discount, even if my client is not personally bothered by the fact.
I suppose in time, that discount will become less and less. From the Buyer’s agent’s perspective, at the very least, that agent should Google the address, and see what comes up.
Turning back to the Listing Agent, the obligation is to investigate, determine and verify the material facts. Presumably, the best source of information would be the Seller. If the information is disclosed to the Listing Agent, then it would have to be passed on to prospective Buyers who might be represented by that agent. It would also apply to those receiving “customer service”. But, that disclosure step cannot take place without the Seller’s permission. So, the Listing agent, should:
1) get the permission, or
2) refuse the listing.
Assuming, no information from the Seller, then Google the address etc. At that point, I suppose the Listing agent could proceed in blissful ignorance of the truth., but that would seem somewhat unethical for buyers who are clients, customers or merely consumers.
There is nothing which limits the amount of time that this “fact” remains “material”. This could continue for decades. At a certain point in time it becomes a “curiosity fact”, I would think rather than a “material fact” under the Code.
As for suing, the new Buyers could sue the Seller (very difficult and challenging), the Listing agent, and their own agent for non-disclosure. The claim against the Seller is difficult. A Court would have to conclude that this was a latent defect which would give rise to a duty to disclose.
The main reason to sue the Seller is likely to obtain the evidence in the discovery process that the Seller told his own agent. Once, the Listing agent knows, now there is a disclosure issue.
As for the Buyer’s own agent, if this information can’t be found, then, they will likely get off “scott free”. The lawsuit would have to be commenced within 2 years of the date of the Agreement of Purchase and Sale.
Brian Madigan LL.B., Broker
www.OntarioRealEstate Source.com