Why this matters: Learn to determine when to disclose a prior death on a single family residential property and assess whether a history of death at the residence may affect the buyer’s valuation or desire to own the property.

Follow along with an audio reading of this article adapted as a chapter from our upcoming Real Estate Practice course update.

When and when not to disclose

An agent representing a seller locates a buyer for the client’s single family residence (SFR). On an inquiry by a prospective buyer about the property, the seller agent hands the buyer the seller’s Transfer Disclosure Statement (TDS).

The TDS discloses the seller’s and agent’s knowledge about the present physical condition of improvements or environmental hazards on the property. The seller and seller agent make all mandatory property and transaction disclosures.

The boilerplate language contained in the TDS asks whether any deaths occurred on the property within the past three years or whether any deaths occurred having a material effect on the property’s market value, regardless of when they occurred. The seller marks “No.” The seller agent knows of none within the past three years and none at any time which affect the property’s value. [See RPI Form 304 §26]

Neither the buyer nor the buyer agent inquires about any deaths which may have occurred on the property. Ultimately, the buyer acquires and occupies the property.

Later, the buyer learns a prior occupant died on the property from AIDS before the buyer submitted their purchase offer. Knowledge of the death materially affects the buyer’s decision to own the property.

The buyer discovers the seller agent knew of the prior occupant’s death on the property resulting from AIDS. The buyer claims the seller agent breached their agency duties owed to buyers by failing to voluntarily disclose the death to the buyer.

Did the seller agent breach their general agency duty owed the buyer by failing to disclose the death on the property which does not affect the property value and occurred more than three years before the buyer submitted their offer?

No! The seller agent has no affirmative duty to voluntarily disclose information to a potential buyer regarding a prior occupant:

  • whose death, from any cause, occurred on the real estate more than three years prior to the purchase offer; or
  • who was afflicted with the HIV virus or AIDS at any time. [Calif. Civil Code §1710.2(a)]

Editor’s note — Deaths on the property which occurred within three years of the offer and deaths at any time in the past which materially affect the property’s present value or desirability are treated differently. An agent has no duty to disclose whether former occupants had HIV/AIDS even when directly asked.

Related video:

Read more about disclosing a death on a property.

When deaths require disclosure

A death occurring on a property known to the seller and seller agent is disclosed to buyers and buyer agents when:

  • the buyer or buyer agent directly asks the seller agent about any deaths occurring on the property;
  • a prospective buyer seeks property information, and the death is a material fact that adversely affects the property’s value or desirability; and
  • a prospective buyer seeks property information, and the death, from any cause, occurred within three years before the buyer’s offer is submitted.

A death occurring more than three years before the buyer’s offer need not be disclosed except for deaths affecting property value. [CC §1710.2]

A seller agent may not intentionally misrepresent a death in response to a direct inquiry about deaths on the property. The inquiry by the buyer makes deaths on the property a material fact for the buyer who inquires and must be disclosed.

Related video:

Read more about timelines for disclosures on deaths.

Death within three years

Consider a property where a former occupant died in the home within three years from natural causes.

The seller lists the death in the seller-prepared TDS. The seller agent delivers the TDS to the buyer and buyer agent during negotiations before the buyer submits an offer.

With knowledge of the death, the buyer decides to submit a purchase agreement offer. It is accepted and escrow closes. The buyer takes possession as owner of the property.

Did the seller agent properly handle the disclosure?

Yes! Because the death occurred within three years before the buyer’s offer, the seller agent disclosed the death to the prospective buyer in the TDS before the buyer submitted an offer. Here, the seller agent properly addressed the death rather than deceptively withholding information the seller agent must disclose. [CC §1710.2]

Related video:

Death prior to three years

Consider a prospective buyer interested in purchasing a particular home. The buyer asks their buyer agent whether anyone has died on the property. The buyer agent contacts the seller agent and directly asks whether the seller is aware of any deaths which occurred on the property.

The seller agent asks the seller whether they know of any deaths that have occurred on the property. The seller tells the seller agent a former occupant died in the home four years ago.

Does the seller agent, upon learning about the death of the prior occupant more than three years ago, owe the buyer and the buyer agent a disclosure about the death when the buyer inquired about deaths even though the death occurred more than three years ago?

Yes! Although the death occurred more than three years before the buyer’s offer, the seller agent may not intentionally misrepresent the death in response to a direct inquiry about deaths on the property from a buyer or the buyer agent. When a buyer inquires about deaths on the property, the condition becomes a material fact as the answer may affect their decision to acquire the property. [CC §1710.2(d)]

Related video:

Read more about California’s three-year rule.

Direct inquiry about deaths

Consider a prospective buyer who does not want to own a property where a former occupant has died. The buyer informs their buyer agent of this preference.

The buyer agent reviews the TDS together with other seller disclosures for a property the buyer deems suitable to acquire. The disclosures do not identify any deaths occurring on the property.

Aware deaths other than those mandated for disclosure might have taken place, the buyer agent directly asks the seller agent whether they are aware of any deaths on the property.

The seller agent asks the seller whether they are aware of any deaths at any time. The seller tells the seller agent that a former occupant died on the property some ten years earlier.

Despite knowing about the death, the seller agent tells the buyer agent that no one has died on the property, a situation a TDS does not cover. Here, the seller agent misrepresented the property to the buyer and the buyer agent.

The buyer acquires the property and later learns that a former occupant died on the property and that the seller agent knew about the death when asked about it by the buyer agent. The buyer’s desire to own the property is negatively affected by the discovery. The buyer sells the property and relocates to another property.

May the buyer pursue the seller agent for monetary losses resulting from the resale and relocation due to the seller agent’s misrepresentation?

Yes! Although the death occurred more than three years before the buyer’s offer and is not typically disclosed in a TDS under California’s three-year rule, the seller agent may not intentionally misrepresent the death when responding to a buyer’s or the buyer agent’s direct inquiry about deaths on the property. [CC §1710.2(d)]

Related article:

Brokerage Reminder: Prior occupant’s death on a property – to disclose or not to disclose

Disclosure on inquiry, mandated

Regardless of the initial TDS disclosure of only those deaths occurring within three years of the buyer submitting a purchase offer, on direct inquiry by the buyer or their agent about deaths on the property, the seller agent discloses the seller’s and their knowledge of any deaths on the real estate. [CC §1710.2(d)]

No matter when the death occurred, on direct inquiry, the seller agent discloses their knowledge of the existence of any deaths which occurred on the real estate. [CC §1710.2(d)]

An intentional misrepresentation or concealment of a fact known to an agent in a transaction after a buyer makes a direct inquiry is:

  • a breach of the seller agent’s general duty owed to the buyer to truthfully respond as the representative of the seller of the property; or
  • a breach of the buyer agent’s specific agency duty owed the buyer since the agent represents the buyer in the transaction. [CC §1710.2(d)]

Related Client Q&A:

Client Q&A: Does a seller need to disclose a death which occurred on their property?

Death as a material fact

Further, a buyer’s inquiry to a seller, seller agent or buyer agent into deaths indicates a death on the premises is a fact which may affect the buyer’s use and enjoyment of the property. Because of the inquiry, a death occurring on the property becomes a material fact in any transaction with the buyer who inquired.

On an inquiry into deaths by a buyer or their buyer agent, an affirmative duty is imposed on the buyer agent to either:

  • investigate the existence of deaths; or
  • recommend an investigation by the buyer before they make an offer, unless the offer includes a further-approval contingency about death by a due diligence investigation.

Related video:

Deaths affecting market value

An agent’s duty to disclose material facts known to them which adversely affects a property’s value is not limited in their TDS disclosures of the property’s physical and environmental condition.

Consider a buyer who enters into a purchase agreement negotiated by an agent, acting either as the buyer agent or the seller agent. The offer was preceded by the buyer’s earlier receipt and review of the seller’s TDS about the conditions affecting the use and value of the property.

However, the buyer is unaware multiple murders of notoriety occurred on the property more than three years before the buyer’s purchase offer.

The agent knows about the murders but does not disclose them to the buyer. However, the agent is aware the notoriety of the murders adversely affects the market value of the property, placing its value below the price the buyer agrees to pay.

The seller accepts the offer and the transaction closes, the buyer taking ownership and occupancy of the property. The buyer learns of the murders and sues the agent to collect their price-to-value money losses. The buyer claims the agent had a duty to disclose the deaths since the agent knew the property’s market value was measurably lower than the purchase price paid due to the stigma of the deaths.

The agent claims they do not have a duty to disclose the deaths since they occurred over three years ago and, thus, the agent is not required to disclose the deaths on the TDS.

Did the agent have an affirmative duty to voluntarily disclose the deaths?

Yes! Even though the deaths occurred more than three years earlier, today they continue to have an adverse effect on the property’s market value. This condition of the property affecting value is a material fact known to the agent and intentionally concealed from the buyer — deceitful conduct.

Thus, both the buyer agent and seller agent have an affirmative duty to disclose prior deaths when the death may affect the buyer’s valuation or desire to own the property. [Reed v. King (1983) 145 CA3d 261]

Editor’s note — This issue of notorious deaths is of concern to an agent preparing a broker price opinion (BPO) for their client to make decisions such as selling or buying a particular property.

Related article:

Letter to the Editor: How do I report the death of a licensee to the DRE?