Disclosure of material defects of a property are part of the process of selling a home. When using a REALTOR®, there is a standard PA Seller Disclosure that a seller fills out as a part of the listing process.
A seller should consider the experience that they have had during the time of their ownership, and answer the questions on the disclosure form to the best of their knowledge. There are sections in the form regarding occupancy, roof condition, heating and cooling, plumbing, electrical, environmental concerns and more. The standard PA REALTOR® Seller Disclosure form is more detailed than what is required for the seller to disclose by law.
What are we looking for here when a buyer is reviewing a Seller Disclosure? The intention is to consider “material defects”.
Buyers and sellers usually wonder what constitutes a “material defect”. The PA Residential Real Estate Transfers Law defines “material defect” as: a problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property. The fact that a structural element, system or subsystem is near at or beyond the end of the normal useful life of such a structural element, system or subsystem is not by itself a material defect.
What if there is a tragedy or a crime associated with a property? There has been a case of this nature making its way through the Pennsylvania court system.
On July 21, 2014, the Pennsylvania Supreme Court unanimously decided that a murder-suicide in a property is not a material defect that a seller has to disclose to a buyer.
This case stemmed from a transaction where a buyer purchased a home in which a highly publicized murder-suicide occurred. The new owner found out about the event from a property neighbor after settlement. During the course of the lawsuit and subsequent appeals, the Supreme Court would not hear the appeal on the issue of violation of the Seller Disclosure Law, which meant that this law did not require a seller to disclose a murder-suicide associated with the property. A psychological stigma is not currently accepted as a measurable factor in determining the impact on value or condition of a property, and does not result in structural defects to the home.
Check out this article on the ruling for the details:
This leaves the decision whether to reveal such an event to the seller. An agent representing a seller that does not want a traumatic event associated with the property revealed cannot disclose the event. That agent, if asked directly by another agent or potential buyer about whether such an event has occurred also cannot lie and say “no” – all they can do if asked (unless the seller has given consent to disclose) is to state that they cannot answer the question. This does leave the listing agent open to criticism, unfortunately, but they are also legally bound by the terms of a listing contract in representing their seller.
If you are a buyer in search of a home, and you absolutely would not want to purchase a property in which there was a traumatic event, you should discuss this with your REALTOR®. Your agent can make inquiries to the listing agents of the properties you tour, although some sellers may not even know the history of the home prior to their ownership (some of you may not believe that an owner would not care whether someone was killed or died in their home, but it is absolutely true). Ultimately, keep in mind that it is in your hands to do your own research – which is certainly much easier in this age of social media and information access. A highly publicized murder-suicide, as in this particular case, would only take a simple internet search.