According to California’s Civil Code, a seller of real property has a duty to disclose any facts that materially affect the value or desirability of the property. The most obvious example of this would be anything related to the physical condition of the property. However, value and desirability are relative terms, and because a seller may be held liable for fraud or negligence for failing to disclose, some uncomfortable things and others that are downright strange often need to be considered along with leaky roofs and unpermitted bonus rooms.
What if someone died on the property?
If it happened within three years of the date an offer to purchase the property was made, California law considers that a “material defect” requiring a disclosure. But if the death occurred one day longer than that, even if it was a brutal mass murder, technically the seller and his agent do not legally have to volunteer that information.
Just to make things more complicated, there is one special exception where someone passing away cannot be disclosed even if it happened last week: a death caused by auto immune deficiency syndrome. Federal law classifies AIDS as a disability, so disclosure of someone’s death due to this is considered discriminatory.
If asked directly about this, however, or any other death even if it occurred decades ago, a seller cannot lie.
What about a haunted house? An exorcism on the property? Bad feng shui?
There are no specific references to these, or a host of other gray areas, in California law. That doesn’t mean they haven’t caused problems. In one notable court case, a buyer sued after finding out that the seller had written about ghosts inhabiting his property. The court allowed the buyer to void the contract, although it did not find the seller’s lack of previous disclosure to be fraudulent.
So what should you do if you are selling your home?
Unless required by law, you are under no obligation to divulge every little thing about your property, especially abstract traits. That doesn’t mean you shouldn’t do it anyway.
Keep in mind that once the new owners meet the neighbors, they will probably find out everything.
So here is my advice:
When in doubt, disclose.