When crime taints a house

foreclosure 2

Update: Just today the NY Times reports that the Newtown Legislative  Council will vote tonight, Wed Jan 21, on a proposal to raze the house and keep the land as open space. The Council is expected to vote to “yes.” 

How do you and your characters handle a tainted house, one damaged or stigmatized by trauma? A house where a murder occurred, or one owned by a killer? Or one that’s both, as described in this New York Times article on the home in Newtown, CT where Adam Lanza plotted his crimes against school children and killed his mother?  The town bought the property for one dollar after Nancy Lanza’s estate and her surviving son gave the property, and its  $400,000 mortgage, back to the bank. But now what? Some locals want to tear the house down and turn it back into woods.

The article profiles a real estate broker and appraiser, Randall Bell, who advises banks and estates on handling traumatized properties. He notes the layers of emotion such places carry. His first action at the Lanza house was to dispose of all the contents, including the furniture and backyard playset, to avoid the emergence of ghastly “souvenirs” in the future. The bank, which doesn’t even have a local branch, had already replaced the damaged doors and kept the lawn and garden maintained, so it wouldn’t become an eyesore, further traumatizing the neighborhood. He’s now discussing other options with the town council.

In my legal work, I’ve worked with appraisers who have been  asked to determine whether a property’s value is affected by stigma—in my cases, usually previous fire or water damage, but association with a crime could also stigmatize a property. Appraisers say they can’t ethically call a property stigmatized until it’s been on the market for longer than the time it should be expected to take to sell AND potential buyers have turned it down because of its history. Putting a dollar value on the discount, or deduction, for stigma is tough—how low would the price have to go before it would sell? And how much time will that take? Few “comps”—truly comparable properties, that have experienced similar problems and sold—will exist. Appraisers typically make an educated guess, and could be wrong.

Many states require sellers to disclose crimes known to have occurred in a house. Past physical damage usually must be disclosed only if “material;” that is, the knowledge would affect a reasonable person’s decision. If a drainage problem or fire damage has been thoroughly repaired, disclosure isn’t usually necessary.

Think about the story implications for your characters, whether they’re family, neighbors, real estate professionals, ghosthunters, or gossips.

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8 thoughts on “When crime taints a house

  1. I wondered what would happen to that house. Thanks for providing a follow up on this horrible crime. In this case, even if they tear the house down and let it revert to woodland, I think spiritual leaders of all faiths need to come in and “purefy” the site. It would help the living–of the community and the family.

  2. Great post, Leslie! Certainly I hadn’t thought of what happened to the apartment AFTER an incident occurred. Food for thought!

  3. Good points and ideas. We’ve all heard of houses with ghosts who died a grizzly death there. And in a small town it seems like selling the house would not work well. Great post enjoyed reading it.

  4. Great blog, Leslie. I hadn’t spent much time thinking about this, but it’s a very interesting topic that raises lots of questions. Thanks for the insight!

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