Property disclosures addressing death.

*This information is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal advisor who is familiar with your personal situation. We are lawyers based in California. If your matter involve non-California issues, please contact a local lawyer.*

It is undisputed that all material facts known to the Seller affecting the value OR desirability of the property must be disclosed. Lingsch v. Savage, (1963).

Real Estate Agents deal with many different circumstances surrounding the sale of a property. One of those is, unfortunately, death. The question then is, should the death on the property be disclosed? This has been addressed twice, once by case law, and once by statute:

Death on property may be material. Reed v. King, (1983).

Civil Code §1710.2 states that death on a property need not be disclosed if it occurred more than 3 years prior to a sale. The statute does NOT say that a death within 3 years must be disclosed.

If a death occurs on a property within 3 years, and the circumstances of that death are material (e.g. it was a gruesome or offensive death, or affected the reputation of the property), it must be disclosed. This is not taking into consideration the entirely different situation where a house has a security problem, which would require the security defects of the property to be disclosed. Rather, we are considering situations unrelated to the security of the property itself.

Although it is not on the Transfer Disclosure Statement, many brokerage firms use Supplemental Disclosure Forms which specifically inquire about death. In these cases Real Estate Agents must understand the law in order to avoid lawsuits for their Sellers. If a Buyer subsequently discovers a death occurred within 3 years of the purchase, the Buyer may sue the Seller for rescission or damages.

It is very easy to avoid this problem. Disclose if a death has occurred within the last 3 years. Don’t be the judge of whether it is a material death, or not. Disclose, and let the Buyer decide.

If the death is more than 3 years old Civil Code §1710.2 requires disclosure only if the Buyer asks.

If a Buyer is concerned about death on the property, ask the Seller if any deaths have ever occurred. Although there is no obligation to inquire about material facts since the Seller has a pre-existing duty to disclose (again, withing 3 years), asking up front is easier than discovering a problem later.

Events on a property leading to a death off of the property, should also be disclosed.

One other situation that is specifically addressed in the civil code is, Civil Code §1710.2 which absolves anyone from liability for nondisclosure of AIDS related deaths, regardless of how recently the death may have occurred.

A memorandum from the California Association of Realtors (CAR) issued in June, 1990 addressed the issue of death and AIDS disclosure requirements. If you would like a copy, please call your local Board of Realtors®.

*In accordance with Treasury Regulations Circular 230, we are obligated to inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.*

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