Do you need to disclose…?
On August 13, 2012
By Peg Ritenour
Can a REALTOR be held liable for failing to disclose that a murder or suicide took place on a property? Believe it or not this is a question we receive almost weekly on the OAR Legal Assistance Hotline.
In Ohio, there is no statutory provision that mandates disclosure of such an event on a property. However the seller and their listing agent clearly have an obligation under Ohio case law to disclose any fact of which they have knowledge that could be material to the buyer’s decision to purchase the property. In the case of a murder or suicide, although such an event wouldn’t constitute a latent defect affecting the physical condition of the property, it could be considered to be a material fact to some buyers. For this reason, to avoid a potential lawsuit it may be prudent for an agent to err on the side of caution and disclose the murder or suicide to a buyer.
Before making this disclosure, however, the agent should discuss this issue with the seller and obtain his/her consent. Here is my advice for how to approach the issue with the seller:
- Explain that it is likely the buyer will probably find out about the event from the neighbors anyway, so you might as well get out in front of it. Buyers are more upset (and therefore more likely to sue) when they find out about something after the fact and from a third party.
- You don’t have to tell everyone that looks at the house this information. It is definitely not something you want to broadcast in the MLS or are required to put on the Residential Property Disclosure form that is available to every potential buyer just looking at the property. Reassure the seller you will handle this private, personal information in a sensitive manner and only make disclosure to truly interested buyers. Although you can wait until you receive an offer, the key is to disclose it before the buyer is bound by a purchase contract.
- Make sure that the disclosure is documented for your protection and that of the seller.
If your seller absolutely will not authorize disclosure, then your duty of obedience requires you to follow that instruction. However because non-disclosure could expose you to potential liability, you may want to consider passing on the listing or, at a minimum, get the seller’s instructions in writing. Of course the seller should be referred to his/her own attorney for advice on this issue.