The Supreme Court of Pennsylvania recently decided as a matter of first impression that a murder and suicide that occurred inside a house is not a material defect that a seller must disclose under the Real Estate Seller Disclosure Law (“RESDL”). Milliken v. Jacono, 2014 WL 3579791 (Pa. 2014). The RESDL requires the seller to “disclose to the buyer any material defects with the property known to the seller.” 68 Pa.C.S. § 7303. A material defect is defined as “[a] problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property.” 68 Pa.C.S. § 7102.
In Milliken, a man shot and killed his wife and himself inside the house, and the Sellers purchased the house from the decedents’ estate at an auction. See id. at 1. The Sellers renovated the home and listed it for sale with an agent. Id. The Sellers’ agent was aware of the murder/ suicide and it was also “highly publicized in the local media and on the internet.” Id. The Sellers signed a Property Disclosure Statement, but did not disclose the murder/ suicide. Id. The Buyer received the Sellers’ disclosure statement and agreed to purchase the house. Id. at 2. After the Buyer moved into the house, her neighbor informed her of the murder/ suicide. Id.
The Buyer’s claims turned on whether the murder/ suicide was a material defect of the property or whether the Seller had a legal obligation to reveal such defect. Id. at 3. The Court rejected each of the Buyer’s arguments, thus clarifying this previously murky area of the law. The Court first noted that even though the Seller chose to use a “broad” disclosure, “[v]oluntarily revealing more than is required does not create additional involuntary requirements.” Id. The Court next rejected the Buyer’s argument that the murder/ suicide constituted a material defect. Id. Although such tragic events are disturbing to a majority of the population, they are not “defects in the structure itself.” Id. at 4. The Court explained that “[t]he occurrence of a tragic event inside a house does not affect the quality of the real estate, which is what seller disclosure duties are intended to address.” Id. The Court further emphasized the difficulty of determining damages and the fact that the murder/ suicide was easily discoverable by the Buyer, and refused to impose a new duty to disclose psychological stigmas on a Seller of real property. See Milliken at 5.
The takeaway for Buyers of real property is this: if you are interested in knowing whether a tragic event occurred in the home you are purchasing, you must specifically ask the Seller or its agent because the Seller has no obligation to reveal this information to you otherwise.