Buyer beware
MY FAVOURITE CASE James McDermott, barrister and UCD law lecturerIn a case where a vendor didn't tell the buyer her home was haunted, the judge got into the spirit with ghostly puns
What is your favourite case?
My favourite case is Stambovsky v Ackley, which concerns a ghost estate with a difference.
In 1990 Helen Ackley put her old Victorian mansion in Nyack, New York, up for sale. Jeffery Stambovsky agreed to buy the house for $650,000 making an immediate down payment of $32,500.
However, unbeknownst to its proud new owner, the property was possessed by poltergeists.
As well as performing the usual tasks involved in haunting a house, the phantoms took it upon themselves to wake Ackley every morning by shaking her bed. This haunting was well known in the locality, with the property described in one newspaper article as “a riverfront Victorian (with ghost)”.
It had also been the subject of an article in the Reader’s Digest, which according to one legal commentator constituted “Perhaps the ultimate accolade for any socially ambitious haunted house.”
When she was selling the house, Ackley failed to reveal the fact that it was haunted to Stambovsky who, being from out of town, was unaware of the local folklore surrounding the property.
Stambovsky had expected to take vacant possession of the property and had not been warned about any ghosts who, one imagines, would not be susceptible in the ordinary way to eviction orders.
Concerned that the haunting would reduce the value of his new home, Stambovsky instituted legal proceedings seeking both rescission of the contract of sale and damages for fraudulent misrepresentation. Stambovsky appealed to Appellate Division of the New York Supreme Court after the original trial court dismissed his action.
By a narrow 3-2 majority the Appellate Court decided in favour of Stambovsky and allowed him to rescind the contract.
No divination was required to conclude that having deliberately promoted the presence of the ghost via the national press to the public at large, with whom she had no legal relationship, Ackley was prevented from denying its existence to the purchaser of her property.
This led the court to reach the unique conclusion that “As a matter of law, the house is haunted.”
Ordinarily the principle of “caveat emptor” (buyer beware) would apply, meaning that the vendor would have no duty to disclose defects in their property to a prospective purchaser.
However, the fact that a house was haunted was not something that would become apparent to the prospective buyer however meticulous their inspection of the property, and it was too much to envisage “a psychic or medium routinely accompanying the structural engineer on an inspection of every home subject to a contract of sale”.
