Death on a property is a material fact and must be disclosed, with a few exceptions, of course. Real Estate Agent and Trainer, Robert Rico, explains what the procedure is when selling a house someone died in. Do you want to see more video blogs? Subscribe here!
We have covered the concept of disclosure before in our previous blogs, and how important it is to disclose all material facts when selling a house. People want an honest real estate transaction, and this goes hand-in-hand with being an honest real estate agent. One of the keys to being an honest real estate agent is to disclose the important information to the buyers during any transaction. Information that can make or break a deal.
The sellers have to disclose – in writing – the “material facts” about the house to the buyer, within 7 days of the purchase contract being signed. Material facts include items like a cracked slab, known plumbing issues, or anything else similar. Now we have to ask, what about death? Is death considered a material fact?
Many people are uncomfortable with the idea of a death happening in the house where they will live. It could be superstition, the house could be “haunted,” it could be a personal issue, but the fact remains that some people are very adamant about this and will not purchase a house where someone has died (or due to the way a person has died in the house). At the same time, the sellers still want to get their house sold – so what do they (and you, the real estate agent) do?
The question really boils down to, “Is death a material fact?” and the answer is YES… if the death was on the property within the last three years. Per California civil code 1710.2, any and all deaths within the last 3 years must be disclosed. If it has been more than three years later, technically the death does not have to be disclosed. However, we recommend always erring on the side of disclosure — it’s better to be honest than to conceal facts, when trying to be an honest and reputable agent.
Now, exception to this rule is when the house is a foreclosure or a bank-owned property. Since the bank could not have reasonably known what was happening in the house, they are exempt from the rule about disclosing deaths within the last 3 years.
There will be people that are not going to want to buy a house where someone has died, therefore you obviously don’t make it a centerpiece of the home’s marketing. This might result in lower offers, meaning the death actually affected the value of the house.
Another exception to the California code is that one cannot disclose to any potential buyer the federally-protected medical status (meaning whether they died from HIV/AIDS, for example) of the previous occupant of the house. This is because AIDS is considered a disability. Even if the previous occupant died of AIDS-related complications, you should only disclose that there was a death and not the medical information of the previous occupant.
As you can see, disclosures and death are a very sensitive topic and one that must be addressed with a delicate hand. You definitely don’t want to stop the deal before it happens, but you also don’t want to fall out of escrow due to the buyer finding out about a death that you did not disclose. If you’re in a gray area, you should always disclose – it’s always better to give too much information than not too much.
Keep your principles, keep honest, and you’ll be the best agent you can be.