Tales of Title Terror (4 min read)
This time of year, the foliage shines bright yet the evenings grow longer, colder, and darker. Some say the very atmosphere around us takes on a slightly spooky ambience. But does that frightening feeling spread as far as the settlement industry? How truly scary can the world of Title Insurance really get? To find out, cinch your hoodies tight and gather your pumpkin spiced treats as we prepare to investigate the intersection where Terror and Title meet!
We begin our tour in perhaps one of the scariest places on earth, (insert obligatory loud thunderclap) a New Jersey court room! The tale of The Watcher is so bewitching that even Netflix found a place for it in their robust lineup. The Watcher TV series premiered recently and stars actors Naomi Watts and Bobby Cannavale. So how does Title Insurance fit in you ask? Well, the story unfolds as a lovely young couple purchases their dream home in Union County New Jersey for $1.35 million dollars, believing all to be well and the title clear. Little did they know how wrong they were! Within mere days of moving in they started receiving menacing messages from an unknown source called “The Watcher”. The Watcher’s sinister messages read, “My grandfather watched the house in the 1920s and my father watched in the 1960s. It is now my time.” And he also posed the question, "Have they found what is in the walls yet? In time they will. I am pleased to know your names and the names now of the young blood you have brought to me." This is not exactly a friendly housewarming gift.
Understandably, the family was fittingly frightened and eventually sued the sellers, alleging that the previous owners had received similar letters prior to selling and failed to disclose that the property came with such an evil encumbrance. Their claim proposed that the “The Watcher” had a negative influence on the property value. Eventually the case was dismissed, and it was clarified that according to the state of NJ, defects that do not appear anywhere within the public records and merely affect the marketability of a property, do not fall within the insuring provisions of a title insurance policy. Tune into season one on Netflix should you desire additional and likely slightly dramatized clarification on the matter.
In our next tale of title terror, we see that when it comes to home inspections you really shouldn’t leave any stone unturned! After a clear inspection and survey, a man moves into his brand-new home on a five-acre lot within a beautiful new development. All seemed well with the world. During the sale the development mentioned several odd stones in the back portion of the property, but provided no additional details as that area was not within the construction area or landscaping. The man lived happily in his new home, that is until he eventually attempted to clear an area for a garden. While clearing that garden, the man discovered 19 headstones marking the burial sites of a century old graveyard. Not wishing to share his new home with such unwanted guests, he filed suit against title company, the real estate agent and also the developer, claiming the property was defiled. The new owner not satisfied with simply having the remains removed, he wanted out. Eventually, the remains were relocated, and the property resold save the cemetery, though if the spirits followed no one can be sure.
So, it would appear that buried remains may be covered by your title policy, ominous “Watchers” are not, but what about a good old fashion haunting? In the 1991 court case of Stambovsky v. Ackley, the State of New York passed judgement on this very issue with a legendary ruling stating, “As a Matter of Law, This House is Haunted.” In this example, the Appellate Division of the Supreme Court of NY ruled that a homebuyer could void a $650,000 home purchase since the sellers did not disclose that the home was haunted.
The Court allowed the buyer to pursue cancellation of the contract, because the “haunting” had an impact on the home’s value. An important point of clarification to this tale is that the previous owner widely advertised their unnatural occupants. Ackley and members of her family had reported the existence of numerous poltergeists in the house. According to Wikipedia, Ackley had reported the existence of ghosts in the house to both Reader’s Digest and a local newspaper on three occasions between 1977 and 1989, when the house was included on a five-home walking tour of the city. She recounted to the press several instances in which the poltergeists interacted directly with members of her family. She claimed that grandchildren received "gifts" of baby rings, all of which suddenly disappeared later. She also claimed that one ghost would wake her daughter, Cynthia, each morning by shaking her bed. Furthermore, when spring break arrived, Cynthia proclaimed loudly that she did not have to wake up early and she would like to sleep in; her bed did not shake the next morning. Though Ackley claims to have disclosed the haunting to Stambovsky prior to final closing, Stambovsky denies that fact and wished to back out of the sale.
Though originally ruling on behalf of the hoodwinked and now hexed home buyer, the same Court eventually changed course and stated that even the most painstaking perusal of the public records may not produce proof of the presence of a poltergeist. And like The Watcher, the haunted condition of the house did not constitute a defect in title.
Alas, the precedent seems to suggest that the mere perception of unwelcomed ghosts and gawkers aren’t necessarily covered by Title Insurance policy and thus do need not be disclosed. But what about violent deaths, murders, or suicides which tend to be the leading cause of such hauntings? As outlined by Teresa Traverse of realtor.com, largely it’s a state-by-state issue. For example, if someone passes away peacefully within a home, most states do not require any disclosure. However, certain states like California, South Dakota, and Alaska do require that any known death within the last three years be disclosed. Other states also require differentiation between the nature of death. For example, whether it was a violent death such as murder or suicide and how widely publicized the event was may affect the need to disclose. And still other states only require disclosure if the buyer proactively inquiries into such gruesome details.
In essence, it’s a mix bag of goodies when it comes to state policy on these terrifying title matters. Generally, the law seems to lean towards what is tangible, measurable, and capable of being confirmed in the land records when it comes to cases such as these. Thus, even when well documented by a trained team of ghost hunters or a spiritualist led séance, you are going to have a hard time getting something in writing that can be attached to said property. Whereas grewsome murders are public record and bodies in the backyard can be confirmed. Therefore, if you are buying or selling a property, it is recommended you consult your local laws, attorney, priest, soothsayer, medium or any other expert you may trust on whether there is a need to disclose every ghoul, ghost, goblin, poltergeist, or terrifying tenet ever witnessed on your particular piece of property. In the meantime, we hope you enjoyed these Tales of Title Terrors and Happy Halloween from the Anderson|Biro team!
Anderson|Biro is a full-service, Executive Search firm dedicated to the Financial Services sector around the country. We source talent to service all aspects of the Land Title Insurance, Settlement, and Appraisal industries. We offer quality solutions for clients in these primary fields and beyond. Our candidates are screened for specific industry experience, outstanding track records, and values that complement your mission and culture. We have also built successful partnerships with leading Homebuilders, iBuyers, Fintech, Servicers, Law Firms, Real Estate Brokerages, and Lenders with direct or indirect stakes around the real estate closing table.