Stambovsky v. Ackley involved a man who purchased a house only to later discover that it was believed to be haunted, a fact that the seller had promoted in the press without the buyer’s knowledge. The court determined that the seller had created a condition that affected the property’s value and the transaction between the parties. As a result, the buyer was permitted to cancel the contract and receive a refund of his down payment because the seller had failed to disclose the information about the house’s reputation, which a reasonable purchaser exercising due diligence would not have been able to uncover. The court held that the seller had a duty to disclose this information and that enforcing the contract would be unjust.
In a legal case, the purchaser of a house was permitted to cancel the contract and retrieve their down payment due to the seller’s creation of a reputation that the house was haunted by ghosts, which negatively impacted the property’s value and potential for resale. For instance, Mr. Stambovsky purchased a house from Ms. Ackley, only to later discover that the house was reputed to be haunted by ghosts. Ms. Ackley had advertised the ghostly reputation of the house in the media. Mr. Stambovsky was unaware of this reputation and had no means of discovering it through a reasonable inspection of the property. The court allowed Mr. Stambovsky to cancel the contract and retrieve his down payment because the ghostly reputation of the house, which was created by the seller, negatively impacted the property’s value and potential for resale. This case demonstrates that a seller cannot create a reputational condition about a property that significantly impairs its value and potential for resale and then fail to disclose it to the buyer. If the reputational condition is peculiarly within the knowledge of the seller and unlikely to be discovered by a prudent purchaser exercising due care, then nondisclosure of such information constitutes a basis for rescission as a matter of equity. Additionally, the case highlights that the caveat emptor doctrine, which requires the buyer to exercise due care in assessing the fitness and value of the purchased property, does not apply when the seller has created a reputational condition that is unlikely to be discovered through a reasonable inspection of the property.
Stambovsky v. Ackley is a famous case in real estate law involving a haunted house in New York.
The court ruled in favor of the buyer, Stambovsky, and allowed him to rescind the contract to purchase the haunted house.
The case established the legal principle of “stigmatized property,” which recognizes that certain non-physical defects, such as a property being haunted, can affect its value and desirability.
In some jurisdictions, sellers may be required to disclose that a property is haunted if it is considered a material fact that could affect the buyer’s decision.
The case highlights the importance of full disclosure in real estate transactions and the potential impact of non-physical defects on a property’s value.
In some cases, a buyer may be able to rescind the contract if they can prove that the seller failed to disclose material information about the property’s haunted status.
Sellers can protect themselves by being transparent about any known non-physical defects, including the property’s haunted status, and by seeking legal advice on disclosure requirements in their jurisdiction.
Some states have laws that require sellers to disclose certain stigmas, including whether a property is believed to be haunted.
Depending on the jurisdiction and the specific circumstances, a seller could potentially be sued for failing to disclose that a property is haunted if it is considered a material fact that could affect the buyer’s decision.
Buyers should conduct thorough due diligence, including asking the seller about any known stigmas or non-physical defects, and seeking legal advice if they have concerns about the property’s haunted status.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/stambovsky-v-ackley/
- Modern Language Association (MLA):Stambovsky V. Ackley. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/stambovsky-v-ackley/.
- Chicago Manual of Style (CMS):Stambovsky V. Ackley. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/stambovsky-v-ackley/ (accessed: May 09 2024).
- American Psychological Association (APA):Stambovsky V. Ackley. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/stambovsky-v-ackley/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts