Law and Government

The Perils of Trying to Sell Your Haunted House

At some point during childhood you were probably entertained with the fantastic tales of an eerie neighborhood house rumored to be haunted. Or perhaps you were the one propagating those rumors. Children, though, aren’t considering that any stigma attached to such a house due to the frightening stories may affect the owner’s ability to sell or rent the house at reasonable prices. It may also lead unwitting buyers into a tangled web of supernatural folklore and ghost hunting visitors. As unfortunate as this may be, let’s hope for the sake of humanity that younger children today are still telling ghost stories without first calculating any future economic risk.

Georgia is a caveat emptor (or “buyer beware”) state, which means sellers generally have fewer disclosure obligations than sellers in other states. However, neither owner nor agent can deny or mislead a prospective buyer if they ask certain questions, such as those regarding the topics of murder or death. While Georgia generally doesn’t impose an obligation to inform prospective buyers of stigma or rumor attached to property, other states have more interesting rules. The most colorful example of this is from New York, which also happens to be where the Amityville House is located.

The Village of Nyack lies on the banks of the Hudson River about 30 miles north of Manhattan. This part of the lower Hudson Valley is an epicenter of paranormal folklore and was often the setting of author Washington Irving’s many stories. In fact, Nyack sits across the Hudson River from Tarrytown and Sleepy Hollow, the setting of Irving’s The Legend of Sleepy Hollow.

Soon after purchasing a stately 18-room Victorian home in Nyack, George and Helen Ackley spoke of ghosts and other paranormal activity on the property. The stories quickly moved from local lore to national prominence. In a 1990 article in the New York Times, Mrs. Ackley said:

“[the ghost] was sitting in midair, watching me paint the ceiling in the living room, rocking back and forth. I was on an 8-foot stepladder. I asked if he approved of what we were doing to the house, if the colors were to his liking. He smiled and he nodded his head.”

The Ackley’s even wrote about their experiences for Reader’s Digest in May of 1977 in an article titled “My Haunted House on the Hudson.” The home was also included in a 1989 five-home walking tour of Nyack and was described in a local newspaper as “a riverfront Victorian (with a ghost).” The Ackley’s son-in-law, Mark Kavanaugh, also wrote about ghosts and other strange activity he had witnessed on the property. He spoke of strange voices and footsteps, feelings of being watched, and a particular instance in which he saw a “womanly figure in a soft dress through the moonlight of the bay windows.”

As is often the case, these stories led to a legal battle. Soon after Jeffrey Stambovsky entered into a contract to purchase the property in 1990, he was aghast to find that the house had a reputation for being haunted. Being from Manhattan, he wasn’t aware of the local folklore surrounding the house. He must have also missed the May 1977 issue of Reader’s Digest.

The Ackley House in Nyack

Mr. Stambovsky attempted to back out of the contract, but a state court in Manhattan dismissed his case. That’s fortunate for us because it led to a spirited opinion by Justice Rubin of the New York Appellate Court. After finding that Mr. Stambovsky “hadn’t a ghost of chance” in a fraudulent misrepresentation claim against the seller, Justice Rubin ruled that Mr. Stambovsky could seek to rescind the contract and recover his down payment ($32,000). Here, the court drew a distinction between the buyer being able to seek damages at law (fraudulent misrepresentation) and the buyer being able to seek a return to their original state through equity (rescission of contract).

While Mrs. Ackley and her agent generally had no duty to disclosure certain facts that were readily available to Mr. Stambovsky, they did have a duty to disclose the haunting reputation of the house. This is because it was Mrs. Ackley herself who created the reputation and it’s a reputation that would be unlikely to elicit an inquiry from Mr. Stambovsky. By not disclosing this, she took advantage of Mr. Stambovsky’s ignorance. This, the court said, is offensive to its sense of equity and compels it to release the “unwitting” Mr. Stambovsky from “a most unnatural bargain.”

So be careful before you embark on a multi-decade endeavor to convince the public that your house is haunted. But then again, there’s probably someone out there looking for a good haunted house.

 

Cover Photo Credit: Wikipedia

Sleepy Hollow Photo Credit: Daniel Case via Wikipedia

Downtown Nyack Photo Credit: Johndude 11 via Wikipedia


 

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