The following is a guest post by Mary-Claire Sarafianos, a former intern with the Digital Resources Division of the Law Library of Congress. She is a second-year Ph.D. student in English at the University of Missouri. She studies silence and structure, both as problems in archives and as features of 19th-century American women’s writing.
In the village of Nyack, New York, an 18-room Victorian estate perches on the edge of the road, looming big and blue above the Hudson River. Local legend proclaimed that the house was haunted. Many a ghost story had been told about this home–a Navy lieutenant from the American Revolution lurking around the basement, an invisible force shaking beds, and a spirit floating and rocking in the middle of the living room. The house and the various spectral presences within it were well-known by the local people of Nyack, but these stories have gone beyond local legend–unlike any other house in American history, 1 La Veta Place was declared, as a matter of law, haunted.
But before the house’s ghosts became a matter of legal record, 1 La Veta Place was considered haunted by locals. The house was even “included in a five-home walking tour of Nyack and described in a November 27th newspaper article as ‘a riverfront Victorian (with ghost).’” (Stambovsky v. Ackley, 169 A.D.2d 254, 256 (N.Y. App. Div. 1991.) During her time living at 1 La Veta Place, Helen Ackley not only spoke publicly about the ghosts, she wrote about them on both a local and national level. Ackley wrote a story detailing her house’s various phantasmal residents in a local newspaper in 1982, in addition to an article she wrote for Reader’s Digest in 1977 that described the ghosts and their relationship to the human inhabitants of the home. (Stambovsky at 256.) Apparently, the ghosts at 1 La Veta Place were an odd but friendly group of phantoms, but when the house went up for sale, these ghost stories were confronted with the looming figure of the law, leading to the case of Stambovsky v. Ackley, or what is colloquially known as “The Ghostbuster Ruling.”
When Ackley put the home up for sale, she hired Ellis Realty, who would become her co-defendant in the ensuing legal trouble. Jeffrey Stambovsky, a New York City resident who was unfamiliar with the Nyack folklore and the reputation of the Ackley home, made an offer on the home for $650,000. (Stambovsky at 256.) But some time between making the down payment and closing on the house, Stambovsky discovered the reputation of 1 La Veta Place. According to the majority opinion, when Stambovsky discovered that he was purchasing an allegedly haunted house, he “sought to rescind the $650,000 contract of sale and obtain return of his $32,500 down payment without resort to litigation.” (Stambovsky at 261.) When this did not work, Stambovsky brought his complaint to court and requested not only to cancel the contract to purchase the home but also to request damages for fraudulent misrepresentation by Ackley and her real estate broker, Ellis Realty. (Stambovsky at 256.) And just like that, the house became less of a local legend and more of a legal entanglement.
The appeals court found that caveat emptor did not apply to Stambovsky’s case. As the majority opinion states, “[a]pplying the strict rule of caveat emptor to a contract involving a house possessed by poltergeists conjures 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 appeals court allowed Stambovsky to seek rescission of the contract for sale of the home. (Stambovsky at 260-261.) What the case affirms is not that ghosts exist in a legal sense, but that if the house can be considered haunted enough to merit being a stop on a tour of haunted houses and be the subject of an article in Reader’s Digest, then that spooky reputation must be disclosed to potential buyers.
This verdict presents both sellers and buyers of real estate with complicated questions about the reputations and histories of property and, though not everyone believes in ghosts, houses are often haunted by the crimes, tragedies, and misfortunes that have happened within their walls. Such houses are considered stigmatized properties, which are properties that have been “psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such an event being one that has no physical impact of any kind.” Whether there is a reputation for ghosts, crime, or misfortune, the public perception of stigmatized property can make it difficult to sell, regardless of the quality of the land or structure. In the case of Stambovsky v. Ackley, the stigmatized nature of the property could actually attract buyers; 1 La Veta Place drew the attention of The Amazing Kreskin, a mentalist who wanted to buy the house, despite its haunted reputation.
The legal responsibilities of both sellers and buyers of stigmatized property vary from state to state. In New York today, deaths, crimes, or stigmatizing features of a property are not required to be disclosed to a seller, but the buyer may inquire as to any of these concerns and the seller may “choose whether or not to respond to the inquiry.” Pennsylvania law has upheld similar requirements, particularly in the case of Milliken v. Jacono, which concluded that “psychological damage to a property cannot be considered a material defect in the property which must be revealed by the seller to the buyer.” (Milliken v. Jacono, 60 A.3d 133, 138 (Pa. Super. Ct. 2012).) While many states follow New York and Pennsylvania, other states require that sellers disclose to buyers whether certain violent crimes were committed on a property. In Alaska, if a licensee knows that a murder or suicide occurred on the property within the last year, they are obligated to disclose this information to the buyer before an offer is made or accepted. In South Dakota, a similar law is in place that requires a property disclosure statement that includes the question: “Since you have owned the property, are you aware of a human death by homicide or suicide occurring on the property?”
Some states have no requirements or laws on the books that indicate whether a property’s tragic or torrid history needs to be disclosed to the buyer, but certainly no other states have put their caveat emptor doctrines to the test against ghosts in the way that New York has. In the interest of ending on a slightly more humorous note, I turn again to the majority opinion of Stambovsky v. Ackley, which brought a level of humor to the conclusions of the case that have earned it the nickname “The Ghostbusters Ruling.” The majority opinion references the movie Ghostbusters by name and uses even more ghostly puns than I have employed throughout this blog post. (Stambovsky at 257.) The humor of the majority opinion even weaves its way into the logic of the case where the judge states that “if the language of the contract is to be construed as broadly as defendant urges to encompass the presence of poltergeists in the house, it cannot be said that she has delivered the premises ‘vacant’ in accordance with her obligation under the provisions of the contract rider.” (Stambovsky at 260.) In keeping with the humor of the court opinion, this case remains a spot of humor in contract law curricula across the country. Stambovsky v. Ackley and cases like it continue to spark conversation and legislation around caveat emptor and stigmatized property.
If you are interested in learning about how English law handles the disclosure of hauntings, see the previous In Custodia Legis post, “Revealing the Presence of Ghosts.“
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