Business Workshop: No need to disclose 'psychological' property defects

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A Pennsylvania court has ruled that a seller of real estate does not have to disclose that a violent crime occurred on the property.

Pennsylvania makes property sellers complete a disclosure form that details material defects with the property. Typical disclosure statements might include the presence of asbestos, the use of knob-and-tube wiring, wood-destroying pests, and other issues.

In the case in question, a couple did not disclose that a murder-suicide had occurred on a property they put up for sale in Delaware County. After the closing, the buyer learned of the murder-suicide and sued both the couple and the real estate broker for failure to disclose the violent crime.

The buyer alleged that the murder-suicide constituted a material defect that decreased the value of the property and therefore required disclosure under the law. The trial court disagreed and entered a summary judgment for the seller. On appeal, the Pennsylvania Superior Court reversed the lower court's decision and remanded the case to the trial court.

After the case was reargued, the result was reversed. In issuing its opinion, the court noted that state law sets forth a list of 16 specific material defects requiring disclosure, each of which is related to the physical structure of the building or the condition of the surrounding property. The court said that the fact that a murder-suicide occurred at the property is at most a "psychological" defect and that the language of the law plainly establishes that the Legislature did not intend to cover psychological defects.

The court further reasoned that requiring sellers to disclose that a murder-suicide had taken place on a property would create a slippery slope. What would be next -- disclosure of burglaries in the neighborhood?

The ruling underscores that sellers don't have to disclose every negative thing about a property -- just what Pennsylvania law says are material defects.

-- Frank Kosir Jr.
Meyer Unkovic & Scott


Business Workshop is a weekly feature from local experts offering tidbits on matters affecting business. To contribute, contact Business Editor Brian Hyslop at


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