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Should the seller reveal a house's murderous past?

THE BALTIMORE SUN

MIAMI -- John Moreno loved everything about his new town house nestled in Southwest Dade County's fashionable King's Court community: The big yard, the privacy, the stylish grounds.

Then he found out about the mass murder in the bedroom.

A little something his real estate agent neglected to mention.

"We got to know a few people on the block and finally they confronted us with the fact that six people had been killed in our house," says Mr. Moreno, a 34-year-old seafood importer. "I said, 'You've got to be kidding.' They said, 'No, we're not.' One neighbor had a tape of the television report and his wife got together with my wife, and that was it. My wife was in a panic."

The mystery surrounding the 1981 slaying of the King's Court Six lingers still, but life goes on at the scene of the crime -- now Mr. Moreno's home, much to his chagrin. Like lots of other folks who unwittingly purchase "murder houses," as they are loosely called in the real estate business, Mr. Moreno says he never would have signed on the dotted line had his agent first informed him of the town home's extraordinary past.

But sign he did, becoming one more distressed buyer caught in an emotional debate involving the sale of "stigmatized" or

"psychologically impacted" properties, real estate jargon for a house where something horrible has happened. A proliferation of new laws and nasty lawsuits highlights the legal and ethical -- and sometimes ghostly -- problems that can arise from such transactions.

"Bad luck? Ghosts? I try to stay away from that kind of thinking," Mr. Moreno says. "But I must say, I have woken up and taken a second look now and then."

So have Arne and Corinne Roslund, a Boca Raton, Fla., couple who filed suit against the Coldwell Banker real estate company after buying a $259,900 home that in 1987 was the scene of a particularly gruesome murder-suicide, a historical feature not 11 divulged to the couple until a boy rode by on his bike shouting, "You live in the murder house!" Ditto for Michael Stuve of Hollywood, Fla., who only recently discovered that 16 years ago a woman was shot dead on his patio, an event he thinks might explain why his children "get kind of spooked" now and then.

What happens when a would-be buyer becomes interested in a house that once was the scene of a grisly crime? Or suicide? Should the seller or broker disclose the property's history to the prospective buyer?

The short answer is: It depends. On what state you live in. On what the law says. On the precise circumstances of the crime, death or other unfortunate event.

"It's a big gray area," says Trey Goldman, an attorney for the Florida Association of Realtors (FAR). "Definitely something we'd like to see settled."

The debate began in the early '80s, when an elderly California widow sued a seller and real estate agent for failing to tell her that her new house was the setting for the murders of a mother and four children. Quoting Shakespeare -- "truth will come to light; murder cannot be hid long" -- an appeals court ruled that sellers have a duty to disclose bloody murder if it can be established that it affects the value or desirability of the home. The opinion, of course, left plenty of room for interpretation, which in turn left room for more lawsuits.

As the Roslund case makes headlines on CNN, the Florida association's legal hot line buzzes with calls from members who want to know whether to disclose a home's unsavory past to a prospective buyer: What if a teen-ager committed suicide in the basement? What if a woman shot her abusive husband in the bedroom? What if a child was murdered in the house next door? What if . . ?.

In most cases, FAR recommends disclosure, at least until legislators pass a more definitive bill. For now, Florida case law says simply that a seller must disclose all "material" facts that are not immediately obvious to the buyer and that might affect property value. The question is, What is material?

"It's one thing if your roof leaks," says Mr. Goldman, who generally advises agents to disclose murders just to be on the safe side. "You pretty well know that's important. But let's assume there's a murder on the property. Is that a material fact? Does it affect the value of the property? Well, certainly not like a leaky roof. These things are somewhat subjective."

Indeed, what gravely disturbs one buyer might not raise an eyebrow on another. Gregory Cook, for example, was unfazed by the news that a 15-year-old girl had fatally shot her father, Metro Dade County police sergeant Joseph Lodato, in the Southwest Dade home he bought for $75,000. Mr. Cook, who had been told only that the sergeant had "passed away," knew something was up after he moved in and started receiving bills from a psychiatric hospital where Jennifer Lodato had been sentenced.

"I sort of put two and two together," Mr. Cook says. But, "It doesn't really bother me, and I don't blame them for not being more explicit. Something like this is very personal." Then again, "if it was mass murder, you know, Helter-Skelter, I might feel differently."

And when a tenant told Pauline Springer that her Coral Springs, Fla., duplex might be haunted, she wasn't spooked, just curious about the details: In 1982, a husband confronted his wife in the kitchen during a rousing argument over his sloppiness. The man grabbed a gun and said, "One of these days . . ." The gun went off. The woman died.

"I really haven't given it too much thought," says Ms. Springer, who holds a real estate license herself. "I've had tenants in there and nothing has woken them up in the middle of the night rocking the room. No ghosts have overturned the place."

Then there's Irene Rodriguez. The 31-year-old nurse bought a Leisure City, Fla., home where two widowed sisters, 86 and 90, were stabbed to death by an intruder.

"It bothered me a little bit, especially coming from a Latin culture," says Ms. Rodriguez, who moved from Cuba at age 10. "We have this thing that before you move into a house, you have to bring a priest to bless it. I didn't really believe in that, but my grandmother would have been appalled. Spirits and all that."

Some people, particularly real estate people, fret that all this talk about spirits and stigmas puts sellers in a ridiculous position. Where do you draw the line?

Larry Greer, owner of South Florida's Gold Coast School of Real Estate: "People die in houses all the time. Is a heart attack better than a murder? If the house had roaches, do we have to disclose that? If someone had the flu, do we disclose that? At what point are we getting into overkill?"

The Roslund case might help define that point. The couple contends they were traumatized after learning that a distraught mother seriously injured her 10-year-old son, shot to death her 9-year-old daughter and then killed herself in the very home they regarded as their retirement paradise. Trick-or-treaters avoided the house on Halloween, and Corinne Roslund said she often had visions of the wounded boy staggering out of the house for help, as described in the newspaper articles she researched.

"We tried to live with it for a few months, but we just couldn't," Arne Roslund says. "We were horrified." So they put the house up for sale. When no one wanted to buy, they moved out anyway, and now the bank is foreclosing.

Coldwell Banker, the company that brokered the Roslund sale, issued a written statement in response to the lawsuit: "We are always compassionate about personal tragedy, but . . . in Florida there is no requirement that a murder or suicide be disclosed."

In fact, 21 states have passed disclosure laws that for the most part classify murder and suicide as "non-material" facts that do not affect property values; sellers and brokers who choose not to disclose such events cannot be sued. As a prospective buyer, if you don't ask the right questions, you're likely to find out about your home's unfortunate history from a gabby neighbor . . . or a reporter.

That's what happened to Mr. Stuve, the Hollywood, Fla., mechanic who bought a $58,000 house from a man named John Krellner. "Seemed like everybody's grandpa," Mr. Stuve recalls. But Grandpa never bothered to mention that in 1976 he shot a woman while she was on his patio, earning himself a five-year prison term for manslaughter, or that his brother Richard, who also lived in the home, did time for the second-degree murder of a Hollywood pharmacist.

"Frankly, I never was too pleased with the home to begin with," Mr. Stuve says. "Roof problems. This is just one more mark against it.

"I thought my wife would be upset, but when I told her, she just said, 'That's OK, as long as it wasn't in the house.' "

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