Don't sell your haunted house!

As Halloween approaches, I thought this nice little bit of historical litigation was appropriate. In the 1991 case, Stambovsky v. Ackley, the New York Supreme Court ruled that the would-be purchaser of a home in Nyack, NY be reimbursed his initially forfeited down payment. Why? Because the house was haunted, of course.

Jeffrey Stambovsky, of New York City, was interested in a house for sale until he found out it was haunted. He made an offer, put down a $32,500 down payment, and then refused to attend the closing once he found out that the house- located 1 LaVeta Place- was haunted. He demanded that he be reimbursed his down payment, citing that the fact that the house was haunted wasn’t previously disclosed to him.

Helen Ackley, owner of the home in question, had previously advertised her house as having been haunted. She claimed that poltergeists roamed the halls of the lovely dwelling, and that her bed would be violently shaken every Spring (the ghosts didn’t like waking up early that particular season).

After a much publicized case, which was initially dismissed in lower court, the Supreme Court of New York ruled that, since the house was publicly advertised as having been haunted, it affected the overall value of the home. Subsequently, Mr. Stambovsky was  awarded the return of his down payment. Or, as the Court put it:

Where, as here, the seller not only takes unfair advantage of the buyer’s ignorance but has created and perpetuated a condition about which he is unlikely to even inquire, enforcement of the contract (in whole or in part) is offensive to the court’s sense of equity. Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine of caveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural bargain.”

More of the story can be read in this Wikipedia article.