Full Disclosure Laws: Janet Milliken Sues Seller, Realtor Over Home's Notorious Past

By Susanna Kim

Stigmatized homes are tricky. It can be hard to sell a home where a murder has taken place (as the owner of Jeffrey Dahmer's childhood home can attest). These homes often sell at deep discounts because of their grim histories, but sometimes that works out for investors. In any case, some states have disclosure laws that require real estate agents to inform potential buyers of past deaths in a home that occurred at least a year in the past. In this case, the state didn't and the buyer feels burned.

A Pennsylvania woman has appealed to the state Supreme Court in her lawsuit against a homeseller and real estate agent who failed to disclose that a murder-suicide had taken place in the house she purchased. When Janet Milliken (pictured below), 59, moved from California after her husband died, she had hoped to start a new life with her two teenage children in Pennsylvania, near family. She bought a home in Thornton, Pa., for $610,000 in June 2007. She learned a few weeks after she moved in from a next-door neighbor that a murder-suicide had occurred the year before in her house.

She sued the seller and the real estate agent for fraud and misrepresentation, saying that they made a "deliberate choice not to disclose the home's recent past," according to a court document. The trial judge granted summary judgment in favor of the defendants, saying that state law does not require agents to disclose such events. Then in December 2012, a panel of the state appeals court affirmed that decision.

The matter dates back to Feb. 11, 2006, when a previous homeowner, Konstantinos Koumboulis, allegedly shot and killed his wife, then shot himself in the master bedroom. Joseph and Kathleen Jacono had bought the home on Oct. 31, 2006, knowing of the murder-suicide, for $450,000. Less than a year later they sold it to Milliken, who wants the transaction rescinded and her money back.

Filing a petition to the Supreme Court of Pennsylvania last week with the hope of arguing the case further, the attorney for Milliken, Tim Rayne, said that they "hope to have Pennsylvania recognize that having a horrific event occur within a property can be just as damaging and troubling to a future homeowner as a physical defect, or perhaps even more so."

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"Having a gunshot murder-suicide committed within the home is much more devastating than having a small leak concealed by the previous homeowner," Rayne said. "Physical defects can be fixed. Troubling events that could and did occur in this home could never go away." Rayne said that sellers should be required to disclose troubling events "at least for some period of time."

Abraham Reich, the attorney for the Jaconos and their agent with Re/Max, said, "The majority, en banc [full-court] opinion of the Superior Court was well reasoned and consistent with years of industry practice in Pennsylvania. While the issue is interesting, the number of times it comes up does not warrant Supreme Court review. The Superior Court opinion provides guidance for any real estate transaction in the future and puts to rest the uncertainty of whether a seller has a duty to disclose a murder-suicide or any other type 'psychological damage.' In my opinion, the result is a good one."

Rayne said that Milliken, 59, was "disturbed" when she learned of her home's history from a neighbor. "As she was struggling what and if to tell the kids," he said, her children's friends visited the home for Halloween and told the children about the murder-suicide. "They were very upset upon learning about it and disturbed about the whole situation," Rayne said.

"They were dealing with the death of a father and husband, and wanted to move closer to family, and then this happened to them," he said. "It was a tragedy all around." Rayne said that Milliken and her children are still living in the home. He said they would prefer to move out of the home but can't afford to do so without selling it.

"They feel that if they sold it, through good conscience they would have to disclose," Rayne said, "so it would negatively impact the value."

See also:
Old Haunts, New Buyers: How to Handle 'Stigmatized' Properties
Buyers Beware: Was That House a Crime Scene?

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