Disclosure of Death or Existence of Group Home

QUESTION: I have a new listing. There are two disclosure issues I want to ask you about. First, I was told by the seller that a previous owner killed herself on the property.  Second, there is a group home immediately across the street which houses several persons with developmental disabilities. My question is, what are my disclosure duties  regarding these two facts?

ANSWER: That’s a very good question. As you know, real estate agents generally are required to disclose all material facts about a property that they know or reasonably  should know. However, regarding the suicide that took place on the property, state law specifically provides that the fact that a property was occupied by a person who died  while occupying the property in not a material fact. See NC General Statutes Sections 39-50 (sales) and 42-14.2 (rentals). Thus, you would not be required to voluntarily  disclose the suicide to prospective buyers. However, if a prospective buyer specifically asks about such a matter, you may not knowingly make a false statement, so you may  either answer the question or decline to answer the question. You don’t want to unnecessarily stigmatize the property, so how you choose to answer such a question is  something you should discuss with your seller in advance. Since a buyer would undoubtedly find out sooner or later, consideration should be given to disclosing the suicide  up front in order to avoid a later claim by the buyer that the seller and you had engaged in a cover-up, even if there is no legal basis for such a claim.

Regarding the existence of the group home, state and federal fair housing laws prohibit discrimination in a real estate transaction based on handicapping condition. A  “handicap” has been defined to mean a “physical or mental impairment which substantially limits one or more major life activities…” If the persons occupying the facility across the street from your listing fall within that definition, it would be impermissible for you to either voluntarily disclose or to even answer a specific question from a  prospective buyer about the existence of the group home. “I don’t know” wouldn’t be an appropriate response; you do in fact know, and to indicate otherwise is misleading. A  more appropriate response would be to politely decline to answer the question and explain that it would be a violation of fair housing laws for you to give out information about protected classes of people living in the neighborhood.

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