A New York real estate salesperson is listing a property. The seller informs the salesperson that the property was the site of a widely publicized murder-suicide five years ago. The salesperson is aware that this is a 'stigmatized property' under New York law. What is the salesperson's primary ethical and legal obligation regarding this information?
- AThe salesperson is not obligated to proactively disclose the information, but must answer truthfully if directly asked by a prospective buyer.
- BThe salesperson is legally prohibited from disclosing the murder-suicide, as it is considered confidential information.
- CThe salesperson must advise the seller to disclose the information on the Property Condition Disclosure Statement (PCDS).
- DThe salesperson must always disclose the murder-suicide to all prospective buyers, as it is a material fact.
Show answer & explanationAnswer & explanation
Correct answer: A. The salesperson is not obligated to proactively disclose the information, but must answer truthfully if directly asked by a prospective buyer.
Under New York law, a property being the site of a homicide or suicide is considered a 'stigmatized property' and is generally not a material defect that requires proactive disclosure by the seller or agent. However, if a buyer directly asks about such events, the agent must answer truthfully. This is a specific carve-out from general disclosure rules.
Why the other options are wrong
- B. While not requiring proactive disclosure, there is no legal prohibition against disclosing it if asked; the duty is to answer truthfully.
- C. The PCDS primarily covers physical defects; stigmatizing events like a murder-suicide are generally not included as required disclosures on the PCDS in NY.
- D. New York law specifically states that such events are not material facts requiring proactive disclosure.
Stigmatized Property Disclosure (NY)
In New York, a property being the site of a homicide, suicide, or other death is generally not considered a material defect requiring proactive disclosure. However, if directly asked by a buyer, the agent must answer truthfully.
- No proactive disclosure required for stigmatized properties.
- Must answer truthfully if directly asked.
- Not considered a material physical defect.
Memory trick: A 'Ghostly' past in NY: Don't tell first, but 'Truthfully Confess if They Ask'.