Tuesday, March 31, 2015

(In)Famous Houses

     In a previous column I mentioned the story of the Amityville, New York house, the scene of a gruesome family murder that was sold, led to claimed paranormal activity, movies, books and more sequels, all detailing the house’s sordid past and its alleged possession.  That house has been occupied and sold repeatedly despite its infamy, and without further incident. 

    Other famous or infamous houses face similar problems.  The house used in the Brady Bunch is a real home in Studio City, California.  The real house, built in 1959, was a one story, typical middle class home.  A false second story fa├žade was added for exterior shots and the home was frequently shown during the show’s run and many subsequent movies.  Tourists continue to flock to the home, despite many years of change and the installation of a privacy fence.  Simply google “the brady bunch house” and you will get 23,100 hits, including a www.zillow.com listing at http://tinyurl.com/4yfmj33. Given the notoriety, any listing would have to disclose this to prospective buyers.

   Another infamous house was the home leased to the Heaven’s Gate cult that committed mass suicide in the 9,200 square foot mansion in March, 1997.  The notoriety and required disclosure drove the value of the home down from over $1.2 million to less than $700,000.00.  Eventually, due to so many onlookers and no buyers, the neighbors bought the house, changed the street name and tore down the house, to protect their community.  Apparently, a street name change with a slightly different address has solved the issue, as it appears that a multi-million dollar mansion is now located on the same property.

   One house affected by its notoriety is the Highland Park home of Cameron, Ferris’ best pal in the movie, Ferris Bueller’s Day Off, and the scene of the infamous Ferrari car kill.  Originally listed for $2.3 million in 2009 with hopes that the film’s tie-in added value, it languished on the market for years despite a unique and historic architectural design.  The home finally sold after five years on the market for less than $1.1 million.  One factor that drove down the price was the constant presence of curious tourists, including some who trespassed to get a closer look.  Zillow does not even mention the film in its listing at http://tinyurl.com/lmc9dg.

   The owners of the home in the movies Home Alone and Home Alone 2 put a large “Private Property – Stop” no trespassing sign right on their front lawn to stop the constant flow of trespassing tourists.  Despite the sign, tourist intrusion is a fact of life for this famous house.  Selling for $1.6 million in 2012, the home may not have suffered as much from the notoriety as some other famous houses, as Zillow still describes the home (http://tinyurl.com/ygwbdfq) as, “the quintessential family home, as depicted in ‘Home Alone,’ filmed here 20 yrs ago.”

   An allegedly haunted house was the subject of a legal challenge of rescission when a buyer, after signing a contract, discovered the history of the home as “haunted.” Prior to the sale, the former owner had a deep knowledge of the home’s alleged haunted past. The owner had even written an article that was published in the 1977 Reader’s Digest, “Our Haunted House on the Hudson.”  Prior to signing the contract, neither the seller who wrote the article, nor the listing agent, disclosed the haunted history to the buyer.

  The buyer, unaware of the history at the time of the sales contract, became concerned about the ghostly facts prior to closing and refused to close.  The $32,500.00 deposit was retained by the seller for the buyer’s failure to close, and the buyer’s lawsuit was initially dismissed. The buyer appealed the dismissal and won on his claim for rescission. The appellate decision that followed is full of interesting and ghostly puns and can be found here: http://tinyurl.com/yzdcr6n.

  The appellate court held that the Reader’s Digest article, in which the seller claimed the house was, in fact, haunted, rendered it haunted as a matter of law, whether or not it actually housed poltergeists. The court further held, as a result, that rescission was appropriate under those circumstances, despite New York’s then adherence to the legal rule of Caveat Emptor, or “buyer beware.” 

  Further, the court rejected the buyer’s additional claim of fraud, which sought damages against both the seller and broker, based on allegations that both parties had a duty to disclose the haunting. The court reiterated the general rule that neither party had a duty to disclose those facts. As a result, the court held that the buyer was entitled to rescission, return of the deposit and nothing more.  Under Florida law, the opposite would have been true as to the fraud claim.  Since 1985, the law in Florida is no longer Caveat Emptor, requiring sellers and brokers to reveal all material facts that affect the value of a home for sale.

   In hindsight, the buyer of the haunted house may have made a financial mistake.  The lovely home in Nyack, New York was sold for over $1.7 million in 2012, nearly triple what he would have paid in 1990.  Because of possible issue underlying any home, the best advice to buyers on any home purchase is to ask questions and research any home thoroughly before buying lest something unwanted be discovered.


Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  They specialize in real estate and business law, and can assist buyers and sellers in loans and purchases/sales.  They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com

Sunday, March 1, 2015

Real Estate in the Movies

       With the Maltz Theater bringing back Glengarry Glen Ross, I thought this would be a good time to look at how various real estate issues are portrayed in cinema.  From bad salesmen, bad spouses, and bad ghosts, real estate has been a good issue as a backdrop to explore the relationship between individuals, from greed, envy and fear.

Glengarry Glen Ross

A classic Mamet play turned into an acclaimed picture, Glengarry Glen Ross tells the story of several real estate salesmen trying to keep their jobs in the seamy side of out of state land sales, cold calls and commission based sales.  The name of the game is quality leads, those people who have expressed an interest in buying a timeshare, beach front land or a mountain or lake lot.

     To motivate his employees, the owners of the office send in a foul mouthed consultant played by Alec Baldwin, who motivates the salesman with the classic line, "As you all know first prize is a Cadillac El Dorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you're fired."  An all-star cast includes Jack Lemmon, as a washed out salesman, Kevin Spacey as the office manager who holds the keys to the best leads, Ed Harris, Alan Arkin and Al Pacino, the top closer, round out the cast.

    The techniques used in the movie to sell the land are still used today.  ABC, "always be closing" is a key technique to sell what most rational people would deem worthless property by finding a buyer’s weakness and appealing to buyer's vanity, greed, sexuality and the like.  These sales pitches, with come-ons like a free week-end, glossy brochures, or dream vacation spot that is available today only are almost always an exaggeration, designed to convince people, on an emotional level, to part with their money.  Always research carefully and consult with an objective professional before any real estate investment is the key to not making a bad deal you will later regret.

The Money Pit

Buying a home as-is is very common in Florida real estate.  Essentially the buyer relies on two things, the duty of a seller to disclose material facts about a home that affect value (such as a leaky roof, electrical problems, broken pumps, etc.) and the home inspection which is supposed to detect most patent defects.  In The Money Pit, two urban yuppies have an opportunity to buy a “valuable home” on the cheap, with a seller claiming desperation and need for a quick sale. After a quick tour with the owner, who has hidden numerous defects, they rush and buy the home without any professional inspection, only to find it needs hundreds of thousands in repair.

The film starred Tom Hanks and Shelly Long as the couple who buy the disaster and then watch as the multi-month long repair process, with pricey contractors, sanctimonious inspectors and an ex-boyfriend drive them apart.  Since they were not married, their split could have had substantial legal consequences, but like most movies, they reconcile at the end, to provide us with the requisite happy ending.

As they say, if it is too good to be true, it probably is, and rushing to buy a home without proper seller disclosure and a professional inspection can leave you with your own money pit. 

The War of the Roses

     It is often said that marriage is grand but divorce is $100,000 grand.  In The War of the Roses, the battleground is over the ownership of a house between a divorcing couple played by Michael Douglas and Kathleen Turner.  During their marriage, they purchase an old mansion, which Turner spends years improving until it is near perfect.  At that point, with the house remodeling distraction over she realizes she despises Douglas, and demands a divorce, with a further demand she keep the house because she made it what it is, despite his funds paying for the improvements.

     Instead of agreeing, or selling the house, they commence a war, escalating when Douglas, after being thrown out, manages to move back in to the very house in dispute, escalating the war, as the two continue to battle, destroying the house in the process.  Eventually, there fight leaves them hanging from a chandelier, which due to the weight crashes down and kills them both. 

     Since neither would agree to allow the other to keep the house, the only legal recourse should have been a partition, where a court orders the sale of indivisible property (like a single family home).  Either one could bid, with the sale proceeds being split equally.  This simple process would have spared their lives, and allowed the one willing to pay the most to keep the house.  Or better yet, sign a pre-nuptial agreement deciding in advance who gets what if the end of the marriage occurs.

The Amityville Horror

     A classic horror tale based on alleged real world events.  In 1975, Ronald DeFeo, Jr. murdered his entire six member family in their home.  The house remained vacant for over a year, and was then purchased for a bargain price by the Lutz family.  Fulfilling her duty to disclose material facts that affect value, the Real Estate Broker disclosed the murders.  The Lutz' moved in anyway and claimed they had to leave a month later due to claimed paranormal activity.  They sold the rights to their experiences which led to a book, and twelve (yes, twelve) films, including the original 1979 version starring James Brolin and a 2005 remake with Ryan Reynolds.

    The duty to disclose deaths, suicides and murders in homes is always a tricky issue.  Generally isolated events of a non-heinous nature do not require disclosure if the disclosure would not affect the value as determined by a reasonable person.  A mass murder as described in the movie less than two years ago does qualify as a must disclose issue.  Florida law even protects sellers and realtors from having to make a disclosure, and buyers have no cause of action to sue “for the failure to disclose to the transferee that the property was or was suspected to have been the site of a homicide, suicide, or death or that an occupant of that property was infected with human immunodeficiency virus or diagnosed with acquired immune deficiency syndrome.” F.S. §689.25.


Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  They specialize in real estate law and business law, and can assist buyers and sellers in loans and purchases/sales.  They can be reached at 561.594.1452 or by e-mail at mjposner@warddamon.com