Editorial: Ghost stories have no place in real estate

Photo / Thinkstock

If prospective buyers must be told everything about a house, it is hard to know where that would stop

Spirits might haunt only the human imagination but that can be a powerful place. A couple who took disciplinary action against a real estate agency for selling them a house in which a suicide had occurred have won part of their case.

Richard and Evette Campbell complained that they would never have bought the house in Flat Bush if they had known a tenant had taken his life in its garage a year previously. The Barfoot & Thompson agency had regarded the tragedy as a private matter for the previous tenants and believed that since it did not affect the condition of the house, the buyers did not need to be told.

Rationality is surely on the side of the agency. But two adjudication bodies, first the Complaints Assessment Committee and, this week, the Real Estate Agents Disciplinary Tribunal, have ruled the buyers had a right to know. The adjudicators were guided by a principle that potential purchasers ought to be informed of anything that could affect the value of the property.

There is no doubt that an event such as a suicide or homicide within a house makes it hard to sell. The Flat Bush property had been listed by a different agency that told prospective buyers of the suicide and it had not sold. Five months after buying it, the Campbells put it back on the market and it sold. But when a neighbour told them what had happened there, the Campbells told the new buyer, who promptly put it back on sale before the settlement.

The house seems destined to be passed from one unwitting buyer to the next until it finds an owner who does not believe in ghosts.

The disciplinary tribunal calls this a grey area and its advice to agents is that every case should be treated on its merits. Barfoots, which still believes it made the right decision in this case, would have preferred a more definitive ruling. The best the Real Estate Agents Authority can suggest is that time is a consideration - an incident a year earlier would worry a buyer more than one a decade before.

Barfoots might yet appeal to the High Court. It might find the judiciary more worldly about human misfortune and less sympathetic to the view that a building can be held to account for anything that has happened within its walls.

Otherwise, where might this principle end? Will agents need to check with neighbours of all listed houses in future, to ensure that nothing in the behaviour of the previous occupants could cause a buyer to regret buying the place? Will they be expected to call in exorcists? It happens, evidently. A priest told the Herald he has performed blessings after a death that have given home owners a "sense of peace".

A more rational exercise might be to remind the haunted that every house that changes hands has a history seldom known to its current occupants. A house is our most personal space but it was previously just as personal to others. Quite likely it has accommodated death at some time.

If that unwelcome truth causes an irrational market resistance, must agents pander to it? They should be held to account for real estate, not phantoms.