I was recently asked to advise upon the extent of disclosure required when a Realtor accepts a listing of a house in which someone may have died of a disease such as AIDS. Some people might feel uncomfortable in buying a house in which someone has recently died. They may have fear of contracting the disease of which the person died. Alternatively, they may simply feel the house to be unlucky or they may be afraid of ghosts. Regardless of the reason, a prospective purchaser might have a real personal concern with such an event.

On the other hand, more and more people with terminal diseases are deciding to die in dignity at home and hospice is geared to assist such people and their families. Except for a sensational murder or sightings of ghosts, a house does not acquire infamy through the death of its occupant, nor is its value affected.

Realtors have a duty of full disclosure to their clients. The British Columbia Court of Appeal held that the agent's obligation to make full disclose includes everything known to him respecting the subject matter of the contract which would be likely to influence the conduct of his principal (Ocean City Realty v. A & M Holdings.) The test is an objective one to be determined by what the reasonable person in the agent's position would consider likely to influence his or her principal's conduct. Any doubt in the agent's mind should be resolved by disclosure to the principal. The disclosure requirement can go beyond the duty to the agent's principal and extend to the other agent's client where a fiduciary duty or a duty to exercise care can be established. This is a result of the increasing expertise of agents and the subsequent reliance on that knowledge by purchasers. The courts have established that a real estate agent owes a general duty to a potential purchaser to provide information that has either a direct physical or economic connection with the property.

Information regarding deaths has not been viewed as having a direct economic impact in the past. However, the law has been developing in California to the extent that the state legislature has imposed a duty to disclose if a death has occurred on the property within the past three years. Other states have adopted legislation specifically excluding disclosure of such information.

In the case of Tunner v. Novak, the British Columbia Court of Appeal dismissed a claim by the purchaser of property against an agent who did not inform him of a municipal by-law prohibiting building on the front seven feet of the lot. The potential purchaser had not told the agent of the special requirement and the court acknowledged that an agent cannot anticipate every individual concern that the potential purchaser may have. It is the duty of the potential purchaser to inform the agent of a concern and the agent must then provide information to the best of their ability. Even so, because psychological impact of information relating to a death on the property is not directly connected with the property and its value, there presently exists no duty on an agent to inform potential purchasers of such a death.

Please call or e-mail me with questions or comments you might have.