There’s a standard list of things to check for when assessing the suitability of a potential property purchase: structural integrity, rising damp, sagging walls, faulty roofing, signs of asbestos and more. But what about the things you can’t see?
While the physicality of a property can be taken into account during the conveyancing process, how often do buyers extend their due diligence to a history check of the house?
Temporarily suspending disbelief and scepticism, imagine you’ve just moved into your dream home and are awoken each night by gruesome groans and creepy creaks. You think you've bought a haunted home — so, what next?
If you’re saddled with a possessed property and are looking to sell, or you’re concerned about your legal comeback if you end up buying a house with a skeleton or two in its closet, then read on. Just in time for Halloween these property experts reveal the legalities of selling a haunted house in Australia.
Homes with a history
Turns out there’s a name for these types of homes where a traumatic or violent incident has occurred: a stigmatised property.
In real estate speak, a stigmatised home refers to a property that may not appeal to the general market because of an unsavoury event that has occurred there. The structure could have witnessed a death, a violent crime, been used for nefarious purposes, or – in some cases – be allegedly haunted.
Agents in some Australian states must tell buyers if a property has a 'stigma' such as a death or crime occurring in the home. Picture: Getty
“A stigmatised property is a dwelling a buyer perceives to be psychologically impacted by an occurrence – or suspected occurrence – on the property, but which has no physical impact on it,” explained chief economist and head of national research at PRD Real Estate, Dr Diaswati Mardiasmo.
“In other words, while the house might not have any defects of the physical kind, it may have a reputation that could affect a potential buyer’s decision to purchase or live in it.”
Haunted house legalities
Under Australian Consumer Law, vendors and agents are prohibited from engaging in misleading or deceptive conduct. The Australian Competition and Consumer Commission (ACCC) states that:
“Real estate agents must give consumers truthful and complete information relevant to a property, including its features, location, zoning, history, the characteristics or use that can be made of the land, and the property’s price.”
And under certain state-based provisions, agents are also required to disclose any information considered a ‘material fact’ to prospective buyers, which can include information about a property’s past.
“Victoria's Sale of Land Act mandates the disclosure of material facts by vendors and their agents during negotiations for property sales,” said agent and chief communications officer at First National Real Estate, Stewart Bunn. “This includes any information that could impact a buyer's decision, such as past crimes on the property or structural issues.
“In New South Wales, while the common law principle of ‘caveat emptor’ (buyer beware) applies, real estate agents are legally required to disclose material facts about a property. These facts include any information that could not be discovered through typical inspections or searches, like prior criminal activity at the property.
Sellers and agents are obligated to reveal material facts about a property. Picture: Getty
“Similar requirements exist in Queensland, where sellers and agents must disclose facts that would affect a buyer's decision. These include details about the property’s history and condition that are not immediately obvious.
“South Australia also has stringent disclosure laws requiring vendors to provide comprehensive information about the property, including any adverse material facts known to them. Western Australia, Tasmania, and the Northern Territory have comparable regulations that obligate sellers and agents to disclose significant information that could influence a buyer’s decision, though the specifics can vary.”
The degree to which disclosure of stigma is expressly regulated varies between states and each adopts reforms at various times. In fact, several landmark changes to legislation surrounding stigmatised properties have been made fairly recently.
“In Queensland, for example, legislation has been brought into effect in June 2024 referring to disclosure of ‘stigmatised’ properties, which includes disclosing murders, crimes and deaths, even of natural causes,” said property and construction expert and founder of property advocate organisation, Propoholic, Nat Gordon.
Providing proof
Of course, when it comes to supernatural phenomena, providing solid proof of its existence is tricky. Plus, science has not uncovered solid evidence that ghosts actually exist.
“There’s no legislated method to validate a claim of a house being haunted,” Mr Bunn said. “Each case would need to be considered on its merits and I know of no legal precedent in Australia.”
As above, most of the legalities surrounding stigmatised properties will rely upon material facts – things that can be physically seen, touched and recorded – and ghosts, given their invisibility, are tricky to categorise.
A suspected ghost is not something that can easily be proven. Picture: Getty
“It can be argued that ghosts are not a ‘real’ physical item,” explained Dr Mardiasmo. “Ghosts are different to a flood, contamination, or even a murder, all of which would have some sort of physical evidence and timeline.
“Therefore, evidence would need to be gathered in three ways: firstly, disclosure from the owner or seller, which the real estate agent is then obliged to disclose. Secondly, documented proof of ghost sightings reported by other people in the neighbourhood, which then becomes ‘material fact’ thus has to be disclosed. Or, thirdly, there’s an explicit question from the buyer (‘are there ghosts in this house?’) which the real estate agent is then obliged to answer to their best knowledge.”
To disclose or not to disclose?
With laws varying significantly from state to state – which can leave all parties uncertain of what their obligations are in these circumstances – ultimately, when it comes to haunted homes, it all comes down to the vendor and whether they want to disclose that they believe their house is haunted.
After all, putting aside the unlikely instance where an agent has had a supernatural encounter in the home, only the vendor would know of an existence of a ghost in the property.
“When it comes to matters of a spiritual or superstitious nature, a real estate agent would have no way of knowing without an owner’s disclosure,” explained Mr Bunn.
“If a homeowner were to disclose paranormal activity within their home, an ethical agent would advise that they were obliged to disclose that to any buyer who might reasonably have an interest in such information. Should the vendor object, an ethical agent might decide they had a conflict of interest and withdraw their services. The guiding principle is that an agent should disclose anything that they could reasonably consider a reasonable buyer would want to be aware of.”
Sellers are unlikely to disclose anything that would hinder the sale of their property. Picture: Getty
However, most vendors would be understandably reluctant to disclose anything that could impact adversely on the value of their property. While agents need to do their due diligence, when it comes to paranormal activity, they are at the mercy of the ethics of the vendor.
“Best practice for agents would be to err on the side of caution,” said Ms Gordon. “Agents must attempt to find out any relevant information about the property – even if their vendor is being obstructive. If a purchaser or tenant discovers information at a later date, governing bodies can use the law to not only to make an example of the agent, but also, possibly, the property owner.”
A future change in legislation?
Though many prospective buyers or tenants mightn’t be concerned about a possible paranormal presence, there are many for whom a spook would be an absolute deal-breaker because of personal or religious beliefs. This is shown in countries such as the US, where half of the states obligate sellers to disclose ‘stigmas’ – including supernatural activity – or risk voiding the sale. While there is existing precedent overseas, could Australia see laws changing regarding the disclosure of resident ghosts?
“We have, anecdotally, seen an increase in the number of people who believe in ghosts and the paranormal,” said Dr Mardiasmo.
“A 2021 McCrindle Research for the Centre for Public Christianity survey found that 48% of Australians believed in ghosts. Plus, we live in a much more multicultural society – in terms of cultural and religious beliefs, and how ghosts are viewed based on these beliefs. Combined, I wouldn’t be surprised if there is more of a spotlight on supernatural activity being disclosed and thus a change in real estate legislation.”
In some states in the USA, sellers must disclose if they believe their house is haunted. Picture: Getty
On the flip side, Mr Bunn doesn’t see any future changes in federal or state laws that speak specifically to possessed properties.
“Given the likely difficulty in legally or scientifically verifying paranormal activity – and the absence of a trusted Ghostbusters service! – I doubt there will be any specific legislation concerning haunted houses,” he said. “For now, we’ll need to depend on vendor disclosure or something like a vendor’s publicised disclosure of paranormal activity.”
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