The Ghosts of Real Property: A Discussion of The Selling

My younger brother Gabriel Diani wrote and starred in a film named The Selling. The premise of the film is that an honest real estate agent has to sell a haunted house to pay for his mother’s cancer treatment.

The film has won multiple awards at film festivals, including the Friars Club Comedy Film Festival, L.A. Comedy Film Festival, Idyllwild International Festival of Cinema, and the Tall Grass Film Festival. My brother recently launched a Kickstarter project for a limited release of the film.

As a big brother, I am very proud of the way Gabe racked up Best Actor awards like they were billable hours on document review.

The legal issues in The Selling included the disclosure of the multiple ghosts in the house (plus murders and demonic possession). The story involved an open house with bleeding walls and other issues that would significantly decease property value.

Let’s review the limited “body” of case law pertaining to haunted home sales in the United States.

They’re Here

When I first saw The Selling, I was instantly haunted by memories of Property in my first year of law school. The specific apparition was the strange case of Stambovsky v. Ackley. The case might be the only time is United States legal history where a Court actually stated, “…as a matter of law, the house is haunted.” Stambovsky v. Ackley, 169 A.D.2d 254, 256 (N.Y. App. Div. 1st Dep’t 1991).

Stambovsky centered on a home buyer who brought an action for contract rescission because the seller did not disclose the house was haunted by poltergeists. Stambovsky, at *255-256. The seller’s family had “encountered” the spirits for nine years. Adding to the failed disclosure was that the fact that the haunted house had been featured in local and national publications, including a walking tour of haunted houses in the area.  Id.

The Plaintiffs lost at the trial level, based on the doctrine of caveat emptor. The appellate Court rejected caveat emptor under the facts of the case, because it conjured “up visions of a psychic or medium routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a contract of sale.” Stambovsky, at *257.

The Court held the following:

In the case at bar, defendant seller deliberately fostered the public belief that her home was possessed. Having undertaken to inform the public-at-large, to whom she has no legal relationship, about the supernatural occurrences on her property, she may be said to owe no less a duty to her contract vendee. It has been remarked that the occasional modern cases which permit a seller to take unfair advantage of a buyer’s ignorance so long as he is not actively misled are “singularly unappetizing” (Prosser, Torts § 106, at 696 [4th ed 1971]). Where, as here, the seller not only takes unfair advantage of the buyer’s ignorance but has created and perpetuated a condition about which he is unlikely to even inquire, enforcement of the contract (in whole or in part) is offensive to the court’s sense of equity. Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine of caveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural bargain.

Stambovsky, at *260.

I See Dead People

The 1914 case of De Souza v. Soares from Hawaii is part of the small body of US case law involving haunted houses and property sales.

In De Souza, the Plaintiff claimed that when she sold her house to her brother-in-law, she executed the sale of her property based on the Defendant’s “misrepresentation that plaintiff’s house was haunted by ghosts and that she could not recover her health while living there.” De Souza v. Soares, 22 Haw. 17, 18-19 (Haw. 1914).

The Court sided with the Defendant in De Souza, finding that the Plaintiff was not credible, because she “was evasive and lacked in frankness.”  De Souza, at *19.

De Souza is a 98-year-old case from before Hawaii was even a state. However, there was no equitable relief as in Stambovsky, because it was not a seller who failed to disclose the “existence” of ghosts haunting the property, but a seller claiming she was tricked into selling because the buyer allegedly said house was haunted. In De Souza, the Defendant was more credible on the facts and the Plaintiff failed to show any fraud.

Grab Her?! That Was Your Plan?!

There is very little “ghost law” in the United States, to the point where we cannot even say it is a body of law, but a spectre of cases. This is because of the unavailability of living witnesses, judicial resistance to seances in court and the entire question of proving beyond a preponderance of the evidence the existence an afterlife. It would also give new meaning to ghosting a hard drive.

With that said, we do have clear case law on disclosing a known defect in a house. If you have had TV coverage of ghosts reorganizing your closet or additional lifeless faces in mirrors besides your own, you may need both an old priest and a young priest at your open house.