Unless you ask a seller point blank, you are unlikely to find out whether their home was the scene of a murder, suicide, grow operation, or if there’s been water damage or flooding.
Most would agree that this type of information would affect the value of the property. Here’s an example. A house at 934 Ossington Ave. in Toronto took 16 months and multiple listing agents before it sold in 2013 for less than the list price during one of Toronto’s hottest real estate markets.
The property was the site of the murder of Allan Lanteigneon March 3, 2011. Lanteigne’s husband, Demitry Papasotiriou, 32, was later arrested and is charged with first-degree murder. The case has yet to come to trial.
The property was listed eight months after the murder for $973,000 and finally sold for $900,000.
If a real estate agent knows about a murder, they are obligated to disclose this under their Code of Ethics as a material fact. The problem is if the agent doesn’t know about it, there is nothing to disclose.
More and more people are turning to the Internet to try and find answers. Tenants are checking bedbugregistry.com to make sure the building they are interested in has not been reported as having a bedbug problem. Buyer and real estate agents are going toHomeverified.ca and Iverify.com to see whether a property was ever listed as a grow-op or meth lab and whether a prior owner had made an insurance claim on the property for fire or water damage, or sewage backup.
A new website developed by Toronto-based brothers Robert and Albert Armieri is called www.housecreep.com, where visitors can enter an address and see whether a crime was committed on the property. The brothers claim they got the idea while checking the bedbug registry while apartment hunting.
The website claims to have a database of more than 2,000 properties and invites other parties to share information about properties.
Users should beware that some of the information may not be accurate and should be independently verified. Realtor Barry Lebow, who has also been an expert witness on the subject of stigma, recommends buyers do their own online search to find news reports about particular addresses.
I recommend buyers insert a clause into any agreement stating that the seller is unaware of any issues relating to murder, suicide, grow-ops or insurance claims about their property. In addition, speak to the neighbours. You are likely to hear from someone if there was a problem in the past affecting the property.
A real estate agent called me the other day and told me a client’s husband died recently and his wife sprinkled his ashes in the back yard. The agent wondered if she needed to disclose this to potential buyers. I asked her whether it had been windy that day.
With more and more information available on the Internet, I encourage sellers and real estate agents to disclose these types of property stigmas. It will come out eventually. Who needs to go to court to fight about it later?
Mark Weisleder is a lawyer, author and speaker to the real estate industry. You can contact Mark at email@example.com