Buyer Beware! (Of Ghosts?)

            The crunching of leaves, cold nights preceding comfortably cool days, October is the epitome of fall. Halloween is one of the most beloved holidays in this country, surely netting millions for the Nestlé Company and your local dentists. Halloween is known for emphasizing (and celebrating) the things that scare us. However, many places in this country attempt to make money all year-round in an attempt to monetize the bizarre, unknown, and frightening. What people often do not think about is the legal impact of such actions. In Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. App. Div. 1991), a New York Court was forced to decide that “as a matter of law, [a] house [was] haunted.” Yes, in a 1991 case riddled with ghostly-puns, a Court was actually required to write that sentence. In fact, the decision is now known as the “Ghostbusters” ruling. Please join us for a fearsome cautionary tale about disclosures in Property Law.

            After having his petition dismissed, a man appealed his rescission action. The buyer signed a purchase and sale contract on a home in Nyack, New York, a village just outside of New York City. What was the reason for his suit? The purchaser had come to find out the house was “haunted”. New York, like New Hampshire, is a caveat emptor state, meaning “let the buyer beware”. For her part, the seller held the house out as haunted. The seller sought after the publication of her family’s stories of ghostly apparitions haunting the home. The stories appeared in Reader’s Digest and the local press on at least two occasions. These publications gave the home a local reputation of being haunted. By 1989, the home was included on a walking tour of the city, which included mentioning the home’s ghostly inhabitants. However, the buyer was not from Nyack. Therefore, he was unaware of the building’s reputation of having ghostly dwellers. Upon learning of the home’s spectral residents, the seller wished to have a rescission of his contract.

At this point, a reader may ask how could the Court possibly be forced to waste its time with such nonsense. Is the Court really going to say that a buyer can back out of a contract because he is afraid of ghosts? The short answer is yes, but not for that reason. Despite the ridiculous context, there was a real legal question for the Court to answer: How far does caveat emptor apply? The Court answered the question by stating, baring certain nonapplicable exceptions, there is normally no duty to disclose information concerning the premises. However, there are limits to caveat emptor. The basis behind the legal theory is that it is the buyer’s sole responsibility to assess the fitness and value of the property he or she is buying. However, it is not the buyer’s responsibility to consider and ask every single question that could possibly pertain to the property. The Court encapsulates this idea by writing, “there is no sound policy to deny plaintiff relief for failing to discover a state of affairs which the most prudent purchaser would not be expected to even contemplate.” Of course, any person would want to know the facts that may impact the potential value of a home, right?

As preposterous as the facts of this case may be, in New York, and in general, caveat emptor applies to the physical condition of the home. Caveat emptor does not apply to the reputation of a home created by information disseminated to the public through the seller.  The Court held that “[w]here a condition which has been created by the seller materially impairs the value of the contract and is peculiarly within the knowledge of the seller, or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction, nondisclosure constitutes a basis for rescission”. Even express disclaimers will not save the potential defendants. The Court takes time to note that even though the purchase and sale agreement included the phrase to sell the home “as is”, such language assumes that both parties have an equal understanding of what the property is or had an opportunity to reasonably discover such facts. As the Court reasons, “permit[ting] a seller to take unfair advantage of a buyer’s ignorance so long as [the buyer] is not actively misled [is] ‘singularly unappetizing’.” For here, the seller not only took advantage of the seller’s ignorance, but did so on the basis of facts the seller created about the home.

            While you likely will not have to deal with poltergeists when buying or selling your next property, the sale of a home does have its share of terrifying pitfalls. New Hampshire is a caveat emptor state. Surely, you would not want to be left with some haunted manor (made scarier by the termite damage you forgot to ask about). Consider consulting with an attorney that knows the kinds of questions you should ask before signing your name to any contract. At Parnell, Michels & McKay we seek to guide people through what can be obscure legalese to help provide sound legal advice steeped in the practical necessities particular to a client’s situation. If you are interested in learning more about the kinds of questions you should ask when purchasing a home, information you should provide when selling a home, or have questions and concerns about Property Law, please contact us to learn more. Let us help you avoid a “haunting” experience.   

Bill Parnell Awarded Citizen of the Year by Greater Derry/Londonderry Chamber of Commerce

By: Rory Parnell

My father moved to Derry in 1979. He had grown up in Virginia in a town called Falls Church, and then went to Boston University for college. He fell in love with the northeast, and after getting married moved to New Hampshire. There, he started a legacy as a community member who strove to help develop the Town of Derry. I was born a few years later and joined two brothers. We grew up in Derry and went to school here. Growing up, my father had many lessons for us to teach. He was always a proponent of setting a good example for us and working hard to develop us as people.  Now, looking back as an adult I can see now some of the sacrifices he made for us and the community.

When my father and I discuss the type of law firm we want to be, he often said we want to be lawyers who help those in the community but also make our own kid’s soccer practice. As we grew up, he coached our flag football teams, our soccer teams, and even moonlighted as a summer league hockey coach. He did this because he was needed not only by us, but by our teammates and our community. He coached so many teams and joined so many local sports boards and organizations that I don’t think I could list them without someone helping me. I always just expected that this was how it was, and this was normal. As I grew into adulthood, I realized just how much work he had to put in to be there for us and the community.

As Derry moved into the 21^st century, my father was there. I remember we had the Main Street Corporation office in our old East Broadway office, and I remember how much he worked with them to help revitalize the image of downtown Derry. East and West Broadway did not look as it does now. We’ve become modernized and an example to other New Hampshire towns that investing in your community will pay off. He worked hard to develop the image of our community, and continues to do so to this day. He worked hard as president of the Chamber of Commerce and made some difficult decisions. These decisions were hard and took a strong person to make them. Yet, he volunteered to not only make them, but to be a target for those negatively affected. In the end, the community was much better for it, and he was content with that. Getting credit for his work was never something he focused on or sought out.  He was happy with knowing the results were good for those around him.

So, tonight at the Derry/Londonderry Chamber of Commerce Annual Dinner he will be put in a spot that I do not believe he expected. He has been named Citizen of the Year for his tireless work in the community. As I think about the many years I’ve had the pleasure of calling him my father, I am happy to see him recognized. I was fortunate enough to be the one to call him and tell him that he was Citizen of the Year. His reaction was telling. He was speechless, which is something that does not happen often for a lawyer. He had to take a few moments to compose himself, as he felt honored to receive the award. The honor was not from getting the award itself, but from the recognition of the individuals and community members he worked hard to develop this community with. He put in countless hours volunteering for various community programs because he believed that is the way we need to act. We should be positive influences in our community, and strive to better those around us. This was its own reward to him, so being honored as Citizen of the Year meant a great deal to him because of those who chose him. These are his friends and fellow community members working side-by-side with him to make the community better.

To say I am proud of my father is obvious, but the fact the community is able to recognize his efforts means a great deal to myself and the rest of the firm here at Parnell, Michels & McKay. We are so happy to see him get this award tonight and join the list of so many other community members that have received this award in the past.  Tonight, he is named Citizen of the Year, and we are just plain proud of you, Dad. You set an example for all of us to achieve, and I hope we have many years left of working to make our community and the state of New Hampshire better than when we came to it. 

Collaborative Law Alliance of New Hampshire Honors Catherine P. McKay with 2016 John Cameron Award

               We are proud to announce that Catherine P. McKay has been named the 2016 John Cameron Memorial Award winner for her service towards the development of Collaborative law in New Hampshire.  This award is given annually to the individual who best represents and moves forward the goals and ideals of collaborative law.

                The late John Cameron was once quoted by Attorney McKay as having a “collaborative heart”. He, like Catherine McKay, recognized the benefit of keeping legal disputes out of Court and allowing parties to obtain their own relief by working together. This takes the focus off of litigation and the negativity that can accompany it, and instead focuses on a more progressive approach to legal problem solving.

                Collaborative law is an ideal option in family law, and has been a service offered by Parnell, Michels & McKay for many years. Attorney McKay is happy to continue her work in the collaborative law field, and continues to be a pioneer in New Hampshire for the Collaborative Law Alliance.

                If you are interested in collaborative law, please contact us to see whether it can be a fit for you.