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REAL ETHICS by Steve Stazel | May 2008 | Index of all Real Ethics columns
How to handle a stigmatized property
You have just listed a house in which a murder/suicide occurred eight months ago. Do you disclose this to prospective buyers?
The NAR Code of Ethics addresses this very subject. Standard of Practice 2-5 states that “Factors defined as
non-material by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2.”
But does Colorado have laws or regulations pertaining to disclosure of a murder/suicide? What follows is the law in Colorado. You can find this in Chapter 26 of the CREC manual.
Circumstances psychologically im-pacting real property—no duty for broker or salesperson to disclose.
(1) Facts or suspicions regarding circumstances occurring on a parcel of property which could psychologically impact or stigmatize such property are not material facts subject to a disclosure requirement in a real estate transaction. Such facts or suspicions include, but are not limited to, the following:
(a) That an occupant of real property is, or was at any time suspected to be, infected or has been infected with human immunodeficiency virus (HIV) or diagnosed with acquired immune deficiency syndrome (AIDS) or any other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place; or
(b) That the property was the site of a homicide or other felony or of a suicide.
(2) No cause of action shall arise against a real estate broker for failing to disclose such circumstance occurring on the property which might psychologically impact or stigmatize such property.
Several things to consider. You may want to obtain written instructions from your seller as to what they want to disclose. What do you do if the seller says “don’t disclose”? Maybe you discuss this with your managing broker?
If you are a buyer’s agent, should you disclose a murder or suicide? What if you are a transaction broker working with the buyer?
Each month, the Aurora Association of REALTORSŪ Web site features Real Ethics,
a column by Steve Stazel devoted to explaining Code of
Ethics issues for members. A REALTORŪ since 1974, Stazel is a Professional Standards
instructor and senior Ethics
instructor for the Colorado Association of REALTORSŪ.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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