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    The Lawletter Blog

    PROPERTY: Seller of Home May Be Liable to Purchasers for Failure to Disclose a Murder-Suicide Involving the Home's Prior Owners

    Posted by Gale Burns on Tue, Jan 17, 2012 @ 16:01 PM

    The Lawletter Vol 36 No 6                                   

    Alistair Edwards, Senior Attorney, National Legal Research Group

    For obvious reasons, one's decision to purchase or not to purchase a home may be impacted by the knowledge that there was a previous murder or suicide (or a combination of both) at the home.  Does the seller have a duty to disclose this sort of information to a potential purchaser?  Does the failure to disclose this information before the sale is accomplished amount to an actionable fraud or a negligent misrepresentation on the part of the seller?

    Recently, in Milliken v. Jacono, 2011 PA Super 254, 2011 WL 5936768, a Pennsylvania court suggested that a home seller may be required to disclose to a potential purchaser that the house had been the site of a murder-suicide involving the home's prior owners.  First, the court considered whether there was a duty to disclose this information under Pennsylvania's Real Estate Seller Disclosure Law ("RESDL"), 68 Pa. Cons. Stat. §§ 7301–7315.  The RESDL requires that a seller of residential real estate disclose to a buyer any material defect with the property.  See 68 Pa. Cons. Stat. § 7303.  The court indicated that the murder-suicide history would constitute a material defect under the RESDL if it were to have a significant adverse impact on the value of the property.  The court went on to hold that there was a genuine issue of material fact on the issue of a material defect under the RESDL, thereby precluding the defendant seller's and real estate agents' motion for summary judgment on the purchaser's claim for a RESDL violation.

    Likewise, the court also held that there were genuine issues of material fact as to the purchaser's claims for fraud and negligent misrepresentation (as well as the Unfair Trade Practices and Consumer Protection Law claim).  As with the RESDL claim, the court held that there were factual disputes concerning whether the murder‑suicide incident was a material defect.  With respect to the fraud claim, the court commented:

    Whether a fact is material in the context of a fraud claim hinges on whether the transaction would have been consummated if the other party knew of the fact. See Skurnowicz v. Lucci, 798 A.2d 788, 793 (Pa.Super.2002).  Here, Buyer has alleged that had she known of the murder suicide, she would not have purchased the property.  R. at 268a.  Based on the foregoing, we conclude that whether Sellers and Agents failed to disclose a material fact was a question for the jury.  See Alloway v. Martin, 434 Pa.Super. 518, 644 A.2d 201, 204 (Pa.Super.1994) (stating that "fraud is a question of fact for the trier‑of‑fact to decide").  Accordingly, we conclude that the trial court erred in granting Sellers and Agents summary judgment on Buyer's fraud claim.

    2011 WL 5936768, at *6.

    It is important to consider that the above decision was based purely on Pennsylvania law.  Other state courts have also had an opportunity to consider the issue of a seller's (or real estate agent's) duty to disclose the type of information involved in Milliken.  See, e.g., Reed v. King, 145 Cal. App. 3d 261, 193 Cal. Rptr. 130 (1983) (purchaser stated a cause of action against vendor and real estate agent for vendor's failure to disclose that house was site of a multiple murder).  Moreover, other States may have enacted disclosure laws that expressly require a seller to disclose this type of information.

    Topics: legal research, The Lawletter Vol 36 No 6, Alistair Edwards, property law, actionable fraud, negligent misrepresentation, Real Estate Seller Disclosure Law, failure to disclose constitutes a material defect, adverse impact on property value

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