Posted on Jul 23, 2014
The Pennsylvania Supreme Court has considered whether real estate professionals have a duty to disclose that the former owner had allegedly shot his wife and then killed himself on the property. The answer is "NO".
In 2006, Kathleen and Joseph Jacono (“Sellers”) purchased a property through an auction from the Koumboulis estate. The former owner had allegedly shot his wife and then committed suicide on the property. The Sellers listed the property for sale in 2007 with Fran Day and Thomas O’Neil of Re/Max Town & Country (“Listing Broker”). Prior to listing the property, one of the Sellers had spoken with the Pennsylvania Real Estate Commission (“Commission”) about whether murder/suicide was a material defect requiring disclosure and the Sellers were told that these circumstances did not require disclosure. The Listing Broker had a conversation with the Pennsylvania Association of REALTORS® Legal Hotline, and was also advised that murder/suicide was not a material fact requiring disclosure.
Janet Milliken (“Buyer”) learned of the Sellers’ property through her real estate representative, John Restrepo of Fox & Roach LP (“Buyer’s Representative”). The Buyer entered a purchase agreement with the Sellers, and received the Sellers’ property condition disclosure (“PCD”) statement. The PCD did not disclose the murder/suicide as a material defect. The PCD also stated that the property was last occupied in 2006, and the Sellers had owned the property for seven months. The Buyer later testified that she was not aware of the murder/suicide until three weeks after she moved onto the property, although she had received documents prior to closing that listed the alleged murderer as the owner.
The Buyer filed a lawsuit against the Sellers, the Listing Broker, and the Buyer’s Representative, alleging fraud and misrepresentation over the failure to disclose the murder/suicide on the property. The defendants argued that they were not required to disclose the murder/suicide because it was not a material defect. The trial court entered judgment in favor of the defendants, and the Buyer appealed. The Superior Court affirmed the ruling and the Commonwealth's highest Court agreed in its opinion on July 21, 2014.
The court said that this sort of event did not affect the "structure" of the house nor do they affect the quality of the real estate.
As far as buyers agents are concerned, the court said it was not a latent defect and the buyer still needed to do their own due diligence to discover if the house met their needs. The murder suicide was a highly publicized event covered in the local media and well known throughout the neighborhood.
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