House buyers in dark over past

The tribunal said many prospective purchasers might not be bothered by the "sad event" that happened at the property. Photo / Thinkstock

Real estate agency wins compo battle, and feels it was right in not revealing previous suicide at property.

A couple who sold their "dark", "sad" and "depressing" Auckland home before they realised there had been a suicide on the property have lost their bid to be compensated by the real estate agents involved in the purchase.

The Real Estate Agents Disciplinary Tribunal has upheld a Complaints Assessment Committee (CAC) ruling that Barfoot & Thompson should have told its clients about the death, but declined to award any damages.

Richard and Evette Campbell told the tribunal they would never have bought the Flat Bush house if they had known a tenant had taken his life in the garage on the property about a year before the sale.

About five months after the home was bought, the Campbells put it back on the market.

They told the tribunal they felt "uneasy in the property and that it was dark and felt sad and depressing".

After selling the house, the couple discovered via a neighbour about the suicide.

They told the new owners, who sold the house before moving into it.

One of Barfoot's directors, Garth Barfoot, told the tribunal the firm decided not to put information about the suicide in marketing material for a number of reasons, including that it was a personal matter for the former tenants and had no relevance to the condition of the property.

The Campbells appealed to the tribunal against the CAC decision not to award compensation and Barfoot's appealed against the conduct ruling.

However, the tribunal agreed with the committee and upheld its ruling.

It said many prospective purchasers might not be bothered by the "sad event" that happened at the property.

"On the other hand, we realise that many prospective purchasers would find that event to create some sort of stigma or spiritual concern and make them feel uncomfortable on the property."

But the decision said the situation was a "grey area" in the industry and each case should be treated on its own merits.

Barfoot compliance manager Max House said it had to weigh up the confidentiality issue with the seller and making disclosures to the buyer.

"We would have preferred obviously for the tribunal to give us a definitive ruling - they haven't."

But the firm said it still felt it had made the right decision at the time with the information it had and was deciding whether to appeal against the ruling to the High Court.

Anglican priest Alister Hendery has performed blessings in homes where deaths have occurred and he said the owners were generally left with a "sense of peace" afterwards.

Rules for real estate agents

*A licensee must disclose any known faults on the property.
*There has been a greater onus for the licensee to disclose potential issues - such as a development project that could affect the value of the property.
*Suicides and homicides fall into a grey area where in fairness they should be disclosed.
*Timing is also a factor - a death a year ago would be more relevant to a buyer than a death a decade ago.

Source: Real Estate Agents Authority