I came across this interesting article discussing what is required in real estate disclosure. The question posed is whether a murder (or other similarly distasteful occurrence) are required to be disclosed by sellers to buyers in a real estate condition report or other, similar documents.
Believe it or not, I’ve had a client who needed to sell a property where something like this happened. In Wisconsin specifically, a real estate condition report is required to be given to a buyer pursuant to section 709.02 of Wisconsin Statutes. Generally, a seller must disclose any “defects” that they are aware of. A defect means a condition that would have a significant adverse effect on the value of the property; that would significantly impair the health or safety of future occupants of the property; or that, if not repaired, removed or replaced, would significantly shorten or adversely affect the expected normal life of the premises. The question is whether a murder on the property, for example, would have a significant adverse effect on the value of the property.
In my opinion, the question is fact specific, and is a hard one to answer. Certainly, to some people, they would not buy the property at any price if they knew something like that happened on the property. Others probably wouldn’t care. This also raises another question: Where do you draw the line? Is a murder the only thing that would need to be disclosed? If the murder was widely publicized or particularly brutal, does that change things? What if a prior owner was arrested for child pornography? Domestic abuse? Drug manufacturing?
If there is no physical damage to the property that would impair its value, and there was nothing concrete to indicate that the future value of the property would be impaired by the past actions, it is my opinion that the real estate condition report does not require disclosure in Wisconsin. I’m not aware of any appellate or supreme court cases in Wisconsin have dealt with the specific issue. Of course, if the buyers specifically ask the question, then the sellers need to answer honestly. Additionally, it’s not a bad idea for sellers to err on the side of caution and disclose anything that might be an issue up front. Honesty is always the best policy.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.