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Must home sellers disclose murder/suicide?

If you bought a home and found out later that it had been the site of a murder/suicide, you might be more than a bit peeved that the sellers didn’t mention that fact before closing the deal. But would the seller’s lack of candor actually amount to a violation of state law requiring the disclosure of “material defects” in a property?

Last week, a Pennsylvania court was called on to answer that question.

The unfortunate buyer in the case is Janet Milliken. In August 2007, Milliken completed the purchase of a home in West Chester from Kathleen and Joseph Jacono. The Jaconos’ real estate agents were from RE/MAX.

Milliken paid $610,000 for the house. She thought that she might be getting a pretty fair deal having learned that the Jaconos had recently acquired the property at a real estate auction and were probably just looking to turn a quick profit.

Before closing, Milliken reviewed the title report and noted that the Jaconos had acquired the property from the estates of Kostantinos and Georgia Koumboulis. Milliken claimed that the names meant nothing to her at the time and the circumstances tended to confirm her belief that the Jaconos had simply plucked a plum out of foreclosure.

However, the names probably should have rung a bell. Three weeks after moving into her new home, Milliken learned that the property had been the site of a murder/suicide. On Feb. 12, 2006, police found the bodies of Kostantinos and Georgia Koumboulis in the home. The husband and wife had been shot to death.  Police later concluded that Kostantinos had murdered Georgia before turning the gun on himself.    

Milliken rightly thought that the Jaconos should have told her about the tragic events in the home before selling it.

Apparently, the Jaconos also wondered about whether they had a duty to disclose the murder/suicide. The Jaconos allegedly approached their RE/MAX agents about their legal obligations in this regard. The RE/MAX agents allegedly called the Pennsylvania Association of Realtors Legal Hotline and were told that the murder/suicide was not a material defect which required disclosure. The agents also allegedly did their own research which confirmed this conclusion.

So when the Jaconos filled out their seller property disclosure statement on June 17, 2007, they did not disclose to Milliken what had happened to the prior owners.

After finding out about her home’s bloody past, Milliken sued the Jaconos and their RE/MAX agents in state court for fraud and negligent misrepresentation, alleging specifically that the defendants had violated the Pennsylvania Real Estate Disclosure Law. Milliken claimed that the murder/suicide reduced the value of her property up to 15 percent.

The trial court granted the defendants summary judgment, deciding that the murder/suicide which occurred in the home did not constitute a “material defect” under the state real estate law or for purposes of Milliken’s common law fraud and misrepresentation claims.

But last week the Pennsylvania Superior Court overturned that judgment, concluding that a jury should decide whether the murder/suicide was a material defect with respect to Milliken’s home.

With regard to Milliken’s statutory claim, the court observed that the disclosure statement utilized by the Jaconos case provides that, while “the [state real estate disclosure] Law requires certain disclosures, this disclosure statement covers common topics beyond the basic requirements of the Law in an effort to assist sellers in complying with disclosure requirements and to assist buyers in evaluating the property being considered.”

The court noted, too, that the statement required the sellers to disclose any material defects “not disclosed elsewhere on this form.”

“When we view this statement in conjunction with the provision of [state law] permitting additional disclosure, we conclude that if a jury in fact determined that the murder/suicide was a material defect, then pursuant to the disclosure statement used in this case, Sellers and Agents were required to disclose the murder/suicide to Buyer,” the court said. (Milliken v. Jacono)

The court followed similar reasoning in concluding that Milliken’s fraud and misrepresentation claims could go forward.

“Here, Buyer has alleged that had she known of the murder/suicide, she would not have purchased the property. Based on the foregoing, we conclude that whether Sellers and Agents failed to disclose a material fact was a question for the jury,” the court said.

In opening the door for potential liability against the Jaconos and their real estate agents, the court further suggested that the defendants had simply failed to do the right thing when they kept their lips sealed about the fate of Kostantinos and Georgia Koumboulis.

“[T]he Sellers and Agents made multiple inquiries to determine whether they were required to disclose the murder/suicide to Buyer. Instead of expending this effort, they would have been better served by simply acting in good faith and disclosing this fact,” the court said.

– Pat Murphy

patrick.murphy@lawyersusaonline.com

5 comments

  1. I was told that there is no law about disclosing such an event in PA. This took place in the house. The son is selling it. The Realtor aware, I asked about noise, any unpleasant views or other issues, who did the work on the remodel. Didn’t think to ask if a murder/suicide occured in the Master Bedroom! I think the situation of aging and illness is sad and tragic in intself, they were married a long time and they died together. BUT I am creeped out beyond belief by living in a home and sleeping in a room where that happened. When my father died and left me his house on the beach. He died at the hospital, but collapsed in the house. I paid someone to empty the home. And then it sat empty. A hurricane took care of the issue of what to do with a house that I found tragic, sad and filled with horrid images of what happened. And he had a heart attack! This Realtor is pond scum for saying a bullet to the brain for someone who couldn’t say I want to live or die is not a biggie. I hope he gets HONEST and discloses a front page event to a buyer. Who cares if there are new custom cabinets if you think about the original owners living there as newlyweds one killing the other in the “freshly painted” master…..

  2. The Pennsylvania Superior Court made a BAD decision. It sounds like they neglected to consider that the Realtor had a duty to the seller, his/her client and solely to them alone. It was not as if they were trying to hide this fact from any potential buyers, the agent was bound by real estate law NOT to disclosure this fact. The agent worked for the seller and their loyalty needs to remain with them alone. To do anything else would have them in violation of a national ethics rule. However, if the PA Real Estate Comm decides later that is matter is indeed a Material Fact, than the opposite would be the case. The agent would have disclose it even if the seller did not want him to.

  3. I fully agree with Eric Strom. If it’s not considered material fact in PA and the Realtor disclosed the death to the Buyer without the Seller’s permission, then the Seller could have sued the Realtor.

  4. In fact you are wrong Gobryn and Eric. If the value of the home is reduced based on the fact there was a murder there, then it is a material fact. And the fact the Realtor has a duty to the seller has nothing to do with this scenario. A Realtor has a duty to be ethical and honest to all parties, not just his client. Based on your logic Eric, then no Realtor should tell anyone of any defects to the property that a seller wished him not to disclose. Such as foundation issues, mold or poor materials used in construction. I am sure you would be less than happy if you bought a home where someone didn’t disclose mold based on the fact the seller asked him not to disclose. That is not ethical at all, for either party.

  5. No matter law the seller should always disclose a death, especially a murder and/or suicide.

    Go to http://www.DiedinHouse.com, to get help answering the question, “Has someone died in your house?” Using a valid U.S. address, Died in House ™ instantly searches millions of records to determine if a death has occurred at that location. Go to http://www.DiedinHouse.com.

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