Scott Peterson's house for sale

Real estate disclosure issues come to light
By: Janis Mara: Inman News
The Modesto, Calif., home of Scott Peterson, convicted in December of murdering his pregnant wife Laci, is up for sale.

Prudential California Tuesday listed the three-bedroom, two-bath "cottage-bungalow" at 523 Covena Ave. for $379,996.

The sale opens a Pandora's Box of ethical questions about disclosure for agents engaged in the sale of what one broker described as "stigmatized properties," homes with deaths and other controversial issues connected to them.

"If an occupant died on the property, that needs to be clearly disclosed, according to Civil Code section 1710.2," said Ron Peck, a Hayward, Calif., real estate attorney with 28 years' experience. "It never has technically been determined where Mrs. Peterson passed away, but under an abundance of caution, it should be disclosed."

Peck pointed out, "I have had sales where people were murdered a block away. You can imagine that's something people would want to know when buying a property, so I recommend disclosure."

If someone were to buy the Peterson house without knowing its history, if they found out about it soon enough, the buyer could bring an action to rescind or cancel the sale and get their money back, the attorney said. Usually, though, he said, damages are established by appraisal testimony.

"If you bought the house and then discovered its history, their damages would be the difference between what it would really have been worth had there been full disclosure and what you actually paid for it," Peck said.

An event like the murder of Laci Peterson and the subsequent media attention could alter the tenor of a neighborhood for a long time to come, Peck noted. "A good example would be O.J. Simpson's home. People probably still go by there and say, 'hey this is O.J. Simpson's house,'" he commented.

Peck noted that the disclosure only has to be for the last three years. Be that as it may, sometimes it's a good idea to keep disclosing, pointed out Anne Biddell, a Hayward, Calif., Realtor with 22 years' experience.

"We have a home in Hayward where she killed him and buried him in the basement," said Biddell, referring to a wife who murdered her husband.

"That happened 35 years ago and to this day, every time the home is sold, it's disclosed," Biddell said.

Even if it's not legally mandated, Biddell said, disclosure is a good idea.

"I would disclose it because if you don't, the neighbors will. Typically we say if you have to ask the question you have to disclose it," Biddell said.

Though it is necessary to disclose if a death has happened on the premises in the last three years, it's not necessary to explain the cause of death, but Biddell recommends doing so.

"Typically a buyer gets curious and wants to know why. You don't have to tell them what they died of. It's not mandatory, but it usually helps if they were 94 and they passed away in their sleep," Biddell said.

Certain cultures are more sensitive to such things than others, according to Biddell. She also said certain religions have ways of cleansing a home in which someone has died.

"Some culture will bring a religious leader who purges the house of negative energy and bad spirits with a ceremony," Biddell said. "We have had Catholics who have had a priest come and bless the house."

A broker in Montana expressed similar sentiments.

"I would mention it because they are liable to find it out later," said Dorothea Lowe, broker at Sky Lodge Properties in Red Lodge, Mont.

"If I have knowledge of that sort, I slip it in somehow. People need to make their own decision. Some people it doesn't bother and some people would be horrified. I leave it up to the people," Lowe said.

The broker agreed that certain cultures react more strongly to such news.

"Native Americans, if someone was killed or died in the home they are not about to touch it with a 10-foot pole. I don't know if that holds true for every tribe or just certain tribes, but I know it is very important to the Navajos. I found that out when I was selling real estate in Flagstaff, Arizona," Lowe explained.

"There are some people who believe in karma and burn a lot of candles to cleanse the space and some think that's hogwash. I say, leave it up to the people where they want to live."