Real Estate Law in Bucks County: Seller Disclosure

In a 5-4 decision in real estate law, the Pennsylvania Superior Court recently decided that a seller of residential real estate is not required to disclose the fact that there was a murder/suicide by the prior owners in the home.

In Milliken v. Jacono, Mr. and Mrs. Jacono purchased a property at sheriff’s sale that had been the site of a murder/suicide involving the prior owners. The Jaconos appeared to have bought the home as a quick investment and soon after purchasing it, relisted it for sale. They were aware of the murder/suicide and along with their agent and broker consulted with the Pennsylvania Association of Realtors to determine whether they had a duty to disclose it under the mandates of the Real Estate Seller Disclosure Law. They were both advised by the association that disclosure was not necessary.

Several months after purchasing the home, the Millikens discovered that the murder/suicide had occurred at the property.  In a seven count complaint against their own realtor, the Jaconos and the Jacono’s realtor, they sought damages for fraud and misrepresentation. The defendants moved for summary judgment prior to trial arguing that they were under no duty to disclose the murder/suicide as it does not constitute a “material defect” under the Real Estate Seller Disclosure Law. The trial court agreed and granted the motion for summary judgment and Milliken appealed to the Superior Court.

The Superior Court found that the Real Estate Seller Disclosure Law was intended to only cover defects associated with the structures on the property, legal impairments or hazardous substances. The Court specifically determined that the murder/suicide goes to the “reputation” of the property and constitutes a psychological defect which is not within the purview of the Real Estate Seller Disclosure Law.  The Court also determined that the law intended for objective conditions to be disclosed rather than subjective conditions.

The opinion included a strongly worded dissent that argued that the law requires the disclosure of any defect that “would have a significant adverse impact on the value of the property.” Here, the dissenting opinion argued that because the record included expert opinions that the murder/suicide would negatively impact the value of the property that the event must be considered a “material defect” and therefore the parties should at least be given the opportunity to go to trial on the issue.

Real estate professionals and those selling or buying real property should carefully consider this opinion. Although the court found that no duty existed under this set of facts, there could be a later scenario where the court deviates from these limitations.

If you have questions about what is required to be disclosed when selling residential real estate, be sure to consult with one of our attorneys. Our practice has years of experience in real estate law in Bucks County.