THE CONDO SECRET - PART 2

If this is something that matters to you, the safest approach is simple: protect yourself contractually.

When submitting an offer, include a clause requiring the seller to declare whether any of the following occurred inside the property:

+ Any death

+ Suicide

+ Violent crime or homicide

If the seller refuses to sign such a declaration, well then, we know the answer.

This approach is important because laws on disclosure vary widely across countries.

In many developed economies, regulators recognize what is called “psychological stigma”—events that may affect a buyer’s perception of the property even if the physical structure is unaffected.

However, the treatment of such stigma differs greatly.

US

Disclosure laws vary by state. In several states (such as California), deaths that occurred in the property within the past three years must be disclosed if asked by the buyer. Some states also require disclosure of murders or suicides regardless of timing, while others specifically classify such events as “non-material facts” that do not need to be disclosed unless asked directly.

Japan

Japan has some of the strictest expectations regarding “stigmatized properties,” known as jiko bukken. Sellers and brokers generally must disclose suicides, murders, or other unnatural deaths that occurred in the unit.

Australia and Canada

Rules differ by state or province. In many cases, a death inside a property is not automatically considered a “material defect.” However, if a buyer asks directly, agents are typically obligated to answer truthfully.

Philippines

In the Philippines, there is no specific law requiring sellers or brokers to disclose deaths that occurred inside a property.

Because of this, buyers who consider such matters important should raise the issue themselves and put the requirement in writing.