I don’t blame them for suing!
Whatever happened to the old adage, “Disclose, disclose, disclose”?
“Couple Sues Realtor Over Sale Of House Where Double-Murder Occurred”
Tony Van Alphen
The Toronto Star
Eric and Sade-Lea Tekoniemi thought they had bought their dream home in Bowmanville last fall.
But it turned into a house of nightmares after they learned it had been the scene of a horrific double murder 15 years earlier.
That discovery has now led to a lawsuit against the real estate firm, an agent and the house’s former owners for allegedly failing to reveal the home’s history.
“I suffered panic attacks and am still on anxiety medication,” Sade-Lea Tekoniemi said Monday of her response to living in the house.
Eric Tekoniemi noted he also felt stress at work and less companionship at home. The uncertainty about his wife’s health and the frequent trips to the emergency room were hard on him, too.
Although the couple said they wanted to cancel the $253,000 sale as soon as they learned of the house’s history, their lawyer said it was too late because they were legally bound under terms of the deal.
But the Tekoniemis decided to sue those involved in the sale of the split-level, partial-brick house, with a claim filed in the Ontario Superior Court of Justice.
Ron England, who suffered from paranoid schizophrenia, murdered his mother, Marian Johnston, 74, and stepdaughter, Jenny, 6, in the home on April 2, 1996. He stabbed his mother 34 times and the child 89 times. The little girl was left lying on the floor with a knife embedded in her heart.
The Tekoniemis are seeking $450,000 in damages plus costs, from Re/Max First Realty, agent Mary Roy, and former owners Arthur Hewer and Sharron Lindsay, who had themselves purchased the home several years earlier.
The claims made in the lawsuit have not been proven in court.
Ron Gordon, the broker-owner of Re/Max First Realty, would not talk about the case, saying, “I don’t discuss company business with people outside the company.”
Hewer and Lindsay said their lawyer advised them not to speak about it because the case is before the courts. Roy could not be reached for comment.
The couple filed the claim last week. The defendants have not yet submitted statements of defence.
The Real Estate Council of Ontario, which regulates the industry, issued a warning to Roy last month on the grounds that she “deliberately withheld a material fact known to her” regarding the murders from the buyers, contrary to the Real Estate and Business Brokers Act. The decision followed a complaint by the Tekoniemis earlier this year.
The council cited several provisions in the act’s code of conduct, including not engaging “in any act or omission that, having regard to all the circumstances, would reasonably be regarded as disgraceful, dishonorable, unprofessional or unbecoming a registrant.”
Lawyers say the case involves a grey area in common law on the issue of “duty to disclose” — and how to assess what information that entails.
If the claim proceeds to trial, it could become a test case for the doctrine of “caveat emptor,” or buyer beware, and whether the couple’s situation is an exception to that general rule.
In their statement of claim, the couple described the murder information as a “material defect . . . which stigmatized, psychologically impacted and tainted the property.”
The claim said Sade-Lea Tekoniemi had suffered severe depression, and sleep and mood disorders because of the murder revelation and living in the house.
She has experienced heart palpitations, shortness of breath, faintness, nervousness when sharp knives are not out of sight when not in use, and visualizing “extremely graphic and horrifying images during unguarded moments” related to the murders, the claim added.
As a result of continuing health problems, the couple say they want to sell the home but recover any depreciation in value from the defendants because they want proper disclosure made to any future owners.
Another day, another article from the Toronto Star! I may as well be selling subscriptions…
Actually, this story is being talked about quite a lot in the real estate circles right now.
But before anybody actually endeavours into the rules, regulations, laws, etc., most people just say, “Wow, what the hell was the Realtor thinking?”
You can cut a lot of corners in real estate, but it’s usually on the small stuff: photos on MLS, forging a missed initial, etc. But when it comes to something as big as concealing that a brutal double-murder took place in the house you’re selling – I have no clue what this Realtor was thinking.
Did she think she was working “extra hard” for her sellers by disclosing a fact that might cost them tens of thousands of dollars? Perhaps that’s her excuse.
Or maybe she just has no soul.
Thankfully, the presence of a soul is not required in order to qualify for your real estate license. Just a wallet, a beating pulse, and a basic knowledge of grade-four math…
But this is a monumental f-up on her part!
This is an invitation for future litigation!
The words “grey area” are used above to describe the obligation to disclose that a double-murder took place in the house, but I was always under the impression that if a person died in the home, it MUST be disclosed.
I’ve seen MLS listings where the caption reads, “House Is Estate Sale – Elderly Lady Died Of Natural Causes.” I believe you MUST disclose a death in the house, and thus it’s better to say “natural causes” than leave it open to speculation.
Perhaps I’m wrong, or perhaps there are different rules in Bowmanville.
Either way, the parties involved – the sellers, listing agent, and listing brokerage, were all incredibly naive to think that this wouldn’t end up in court one day.
And the one fact we don’t know is this: were the sellers made aware of the brutal double murder when they purchased the house years before?
If they were made aware when they purchased the house, and they decided not to make the current purchasers aware, then I think it speaks to mens rea, or “guilty mind.” They knew that this fact was material, and would cost them, and they made a deliberate and calculated decision to conceal it. That’s a crime, in my books.
You can only take caveat emptor so far. There are measures in place to protect consumers, and until now, most Realtors believed that a death in the house had to be disclosed. I’ve talked about this story to a dozen of my colleagues, and we were ALL under the impression that a death had to be disclosed.
Whether it is, or isn’t, I still think the offending parties were naive to think this wouldn’t bite them in the ass.
The sellers can blame the listing agent for advising the non-disclosure, and the listing brokerage can claim that they weren’t aware of everything that the listing agent did or didn’t do during the course of her business. But in the end, all the parties are at fault. The sellers concealed the fact, the listing agent encouraged them to do so, and the listing brokerage is guilty by association. Sorry, but the only way to maintain integrity in this business is to fault the brokerage for the actions of the agents they employ.
I’ll follow this case closely and update you when we know what happens.
In the meantime, try to put a price on your ethics, your integrity, and your soul.
Tell me if it’s worth a few thousand bucks in real estate commissions or capital-gains on the sale of your house.
These people should all be ashamed…
Ralph Cramdown
at 8:23 am
Boy, those old houses in Europe must each come with a death book disclosing a lot of known expirations!
This certainly isn’t settled law, and there have been more than a few people lately trying to push the boundaries of what counts as a latent defect. Sex offender lives down the street? Gotta disclose, some say. I might ask two things: If you can google it, is the defect really LATENT? And if more buyers and their agents insisted on SPIS (a checklist of stuff to ask the seller to disclose), some of this stuff might be averted.
As I alluded to in my opening sentence, I think this goes to an immature culture. I read an anecdote about a buyer who bought a new construction condo because she didn’t want anyone to have used the bathtub before her precious little self. Get over it. Pre-owned houses come with histories.
Kyle
at 9:14 am
I have to agree with Ralph. I think you should have to disclose anything that might affect the house or property, but insisting there be disclosure on karmic stuff starts to get into the realm of stupid really quickly. If we keep moving the line the listing descriptions will be 5 pages long, mostly consisting of what the seller and agent do not warrnty against. Will we have to have peanuts were consumed in this house warnings eventually?
Darren
at 9:24 am
I pretty much age with everything you’ve said. However if you are selling you should definitely not sign an SPIS. It opens you up to almost unlimited future liabilities. I’ve read more than one horror story. By all means request one if buying though!
Jasmine
at 8:28 am
A decade and a half has passed though. How would a realtor know? Is this info available online? I feel that perhaps a really fresh murder should be declared, but after so many years and no reported hauntings a house should be given a clean slate or they will always be doomed to be labeled the murder house for years and years beyond when anyone remembers why.
Geoff
at 9:15 am
I have to agree with the above poster – I mean look at what you wrote:
“But I was always under the impression that if a person died in the home, it MUST be disclosed.”
There are houses in Toronto that are over 100 years old; and what about converted loft buildings from factories that undoubtedly claimed some (most likely immigrant) lives in their day? Many people at the turn of the century were born in their houses, and some would have been stillborn. Does this count?
I have to agree that there has to be some notoriety involved – I mean if you lived in Europe and came to Canada and were looking at buy Paul Bernardo’s house, I would expect that the realtor mention that this house is notorious in Canada. But a pretty run of the mill suicide/or murder (again, not trying to dismiss the terrible toll this would take on a family, just that it wouldn’t still make the news years after the event) that happened 15 years ago may not be germane to today’s real estate market.
David Fleming
at 10:48 am
@ Geoff
Geez. You had me at “stillborn babies”….
David Fleming
at 10:48 am
PS – the Bernardo house in St. Catharines was demolished and nothing has been rebuilt on that piece of land.
Geoff
at 3:07 pm
A little ghoulish. But isn’t a death a death a death?
PS They destroyed it for the reason of notoriety, which I agree with.
“If all the corpses buried around here were to stand up all at once we’d have one hell of a population problem.” Name that movie!
Gorgon
at 10:24 am
Geoff, my band’s name is Stillborn Baby.
Amazingly, we are going to shoot a music video on the Bernardo plot. (shhh, we don’t have permission – is this a problem?)
We are a themed death-core band. Specifically, our theme/message is threefold:
1) The dead can hear us. Speak quietly
2) Complete reform of CMHC lending practices and implicit guarantees
3) The shinbone is connected to the thighbone. We have bone marrow to thank.
David Fleming
at 3:04 pm
@ Gorgon
Potentially the best comment of 2012!
Gale Brown
at 10:09 am
Actually, another home was built on the Bernardo property and is currently occupied.
Darren
at 9:19 am
Wow. The laws are pretty messed up for real estate. Maybe it’s changed but I saw on a marketplace type show that’s there’s no obligation to reveal that a house was used as a grow op unless specifically asked. That’s something that really matters about a home. But you MUST disclose if someone died?? Not exactly critical to the day to day up keep of a home is it? If a law was broken fair enough, but I think this lawsuit is pathetic. It it wasn’t in Bowmanville I’d be happy to buy at a heavy discount!
Simone
at 1:11 pm
“It it wasn’t in Bowmanville I’d be happy to buy at a heavy discount!”
By this, you’re admitting that the history lowers the value of the home. If a fact that lowers the value of the home is known by the realtor, it should be disclosed.
The debate isn’t about how awful or how old the murder is – it’s about whether the fact, if disclosed, would chase buyers away. In most people’s minds, it would. Therefore, the buyers should have been told so they could make an informed decision.
There are some states in the US that require disclosure of whether a house is haunted. It doesn’t have to do with whether ghosts are real – it has to do with how that perception will chase buyers away.
Darren
at 3:19 pm
I was saying I would not care if someone was murdered there. If others reject it and it lowers my price, fine
Devore
at 2:35 pm
That’s great! … for you. The reason for the discount is that many people will pass on living in this house, thus the price is lower because the house has a smaller market and is less liquid.
It’s not a negotiating tool to get a lower price. For the buyer, it’s either all or nothing… you don’t go… well, someone was murdered here, this disturbs me greatly, but I would be far less disturbed if the price was lowered by 10%. Assuming the list price is already lower vs comparables due to the stigma, just talking about additional discounts because of this fact, over and above “market normal” discount for minor deficiencies.
Ralph Cramdown
at 9:24 am
You need fresh material, David. The Simpsons already did this bit!
Pen
at 9:50 am
The law currently does not require open disclosure of stigma by the seller but it does require disclosure in perpetuity of a grow-up/lab to address some of the above posts. The Real Estate Acts throughout Canada require Realtors to disclose all material facts that may affect the decision of a buyer. The test is: Would the price be materially different if disclosure was made? If the answer is yes or maybe we are required to disclose.
If the buyers ask, disclosure must be made by seller and Realtor.
The seller purchased the property the same year as the murders from the bank and used the same Realtor. They obviously knew. They lived in the property for 6 years, put a lot of money into updating and probably gave no thought to stigma 15 years later. Disclosure of stigma is a requirement in many states so the judge will use that as a precedent to decide.
There are many Realtors who don’t know what they’re supposed to know.
Pen
at 10:04 am
A correction: The first sellers purchased the year of the murders from the bank. The second sellers sold using the same Realtor used for the purchase.
Market Bull
at 9:54 am
Although the case law regarding this issue is far from clear-cut in Ontario, the 15-year time period since the murders and the fact that at least one other owner has lived in the home in the interim, are substantial mitigating factors in favour of the defendants. By way of comparison, California has a 3-year limit regarding such disclosures and other states as many as 6 years.
A quick check of Mary Roy’s status on RECO indicates no history of charges, convictions or suspensions, indicating that even RECO thought the case had such little merit, that a written “warning” was the best result that could be expected.
In legal jargon, I would suggest that the claim for damages in this case are excessive and remote. The lawyers however, will likely make out like bandits. Weak cases like these help to illustrate how the presence of E&O insurance can sometimes promote frivolous litigation in some high profile industries. The hope of course is often for a quick settlement in to avoid adverse publicity and to make the case just “go away”.
JC
at 10:07 am
I once had a discussion about my Broker about this, as my client had purchased a property where the listing agent did not disclose that the spouse of the previous owner had died on the property. (Fell off a ladder)
Her response was that yes, they should have disclosed that, but that with the age of some properties, it is likely that many, many properties have had deaths occur in or on them. As long as the death was not as a result of foul play, it is not a “major” faux pas. Fortunately, my client really wanted the place and the owners unfortunate demise just reinforced to him that he wouldn’t be working on the gutters.
I, like you, had been of the impression that everything should be disclosed. If I know about it, I disclose it.
George
at 10:10 am
Unethical behaviour can provide short-term rewards, but it often catches up to you in the long-term if your reputation takes a hit. In real estate, I would imagine that an agent’s biggest asset is his or her reputation. Jeopardizing that biggest asset by acting unethically is both reckless and short-sighted.
And to anyone who thinks this is no big deal, would you buy a house where a grisly double-murder had occurred? I don’t think the answer would change if the murder had happened 20+ years ago. It’s still creepy and unsettling.
Ralph Cramdown
at 10:55 am
Well, somebody’s got to own that house, unless we start tearing down all murder houses and grow-ops. Who pays for that, exactly? Insurance won’t cover it, it’s a waste of resources, and letting the loss lie where it falls seems like heaping more abuse on an already unfortunate owner.
Happy house hunting:
http://www3.thestar.com/static/googlemaps/homicidemap.html
http://www.globaltoronto.com/Interactives/Marijuana/index.html
Horrido
at 1:29 pm
The **only** reason I wouldn’t buy a house where a grisly double-murder occurred is because I would have some difficulty selling it at a later date. Creepy and unsettling? That’s called “superstition” – s-u-p-e-r-s-t-i-t-i-o-n. What, you think **you’re** going to get killed just because you live in this house?? Do you believe in ghosts? What kind of a feeble mind do you have?
However, I acknowledge that most other people have feeble minds. So I wouldn’t buy this property for that reason.
George
at 3:00 pm
No, of course I don’t think I would be killed. But I would think about it, and that’s not what I would want my home to remind me of. There is a good reason why they destroyed the old Paul Bernardo house. It’s not a case of feeble minds. It’s a case of being reminded of something horrible.
Kyle
at 10:13 am
“Although the couple said they wanted to cancel the $253,000 sale as soon as they learned of the house’s history, their lawyer said it was too late because they were legally bound under terms of the deal.”
Hmmm, Something doesn’t smell right here.
Ralph Cramdown
at 10:41 am
Sounds like a typical lawyer in the mould of Bob Aaron or Mark Weaselawyer. If you read their advice, it invariably ends that the deal must go through!
It doesn’t sound like they’ve done a whole heck of a lot to mitigate, though. $450k in damages? Put the place up for sale, take your lumps, and sue for the difference between what you paid and what you got, plus costs.
Kyle
at 10:16 am
“Although the couple said they wanted to cancel the $253,000 sale as soon as they learned of the house’s history, their lawyer said it was too late because they were legally bound under terms of the deal.”
Something doesn’t smell right here. They found out sometime before closing, so if this disclosure is so material, exactly why couldn’t they walk away?
Horrido
at 1:32 pm
Exactly what I was thinking. The lawyer gave erroneous advice and is liable. Goes to show, not all lawyers are created equal. Some are better than others.
Make sure you are well-represented by counsel.
cquee gee
at 12:07 pm
Ah, litigation. Sounds like we’re entering a buyer’s market? Or is this case too clear-cut and out-there?
Devore
at 2:10 pm
It’s a little crass, but really no different than pre-sale condo buyers suing to wiggle out of their contracts due to some deficiencies or delays. If they made 20, 30, 40% on the deal, they would just sell the place no matter how terrible it was, hug the pile of cash all the way to the bank, and move on with their lives. If these people could sell their house for a $100k profit, even after the murder disclosure, would there even be a case at all?
Sign of the times indeed.
Gwen
at 3:52 pm
Interesting thread. Curious though – as another post, can you suggest a list of questions for a buyer to pose to a seller? Should it be put in writing with an expectation from the seller to answer in writing?
gemdot
at 11:57 pm
isn’t it the case that the realtor can only be held liable if she was aware of this fact AND did not disclose? after all, she can’t disclose what she does not know…
assuming the sellers knew, and did not disclose this fact to their realtor…aren’t they really the ones on whom the ultimate “blame” falls?
i don’t think it’s a MUST to disclose death (unlike the existence of a grow op – as this is a material fact). further, i think it’s worth noting the difference between a death of natural causes, and a murder/homicide. i think this issue relates to STIGMA, and whether or not the realtor believed the stigma to be great enough of a factor/’material’ enough to her buyer clients to be worth disclosing.
It boils down to a judgment call…that is, assuming the realtor was in fact aware of a murder having occurred on the property to begin with.
IMHO, given the …errrr…circumstances surrounding these particular deaths, I would have definitely disclosed this stigma to my clients…but I don’t think any/every death automatically equals material fact…
My guess is that the realtor believed that given the amount of time that had passed, and the fact that the house had already changed hands since the deaths, she did not deem the stigma to be a material issue. A judgment call, yes, but one that – unfortunately – seems to be coming back to “haunt” her……..
connie smith
at 7:52 pm
If you knew Mary Roy you would no this was not something she would to just to make a dollar believe me this is a lady who has a heart so big she would never sell this without discloser if she new about it .mary has a heart of gold she has done so much for so many many people and not just in real estate and there are many people who would agree with me when i say if you deal with mary she treats you like your part of her family . i worked as an agent in the same office as mary and took the real estate courses together and i could not admirer a person more than i do mary . so please don’t judge her this was 15yrs ago and the buyers from what i here new before they bought it and my question to them is why did you move into the house when you new what happen . ?
Betty Kingsley
at 11:25 pm
I personally know Mary Roy and she has more soul then most people could want. From my understanding in Real Estate you only disclose if you are asked “the question” and then you have to be truthful to the buyer about “that” question. Hence “buyer beware”,
Melissa
at 11:10 am
I agree that disclosure is important however there is a point where enough time has passed that the information is not as relevant. I could understand discolsing it to the first buyer of the home after the incident but every buyer from then on out? It’s an unrealistic expectation. Yes if she knew she should have covered herself by saying something however I think these people are really thrilled she failed to disclose the information so they can get a payday – if it’s really about just moving then sue for any money they lose when they relist the house and cut your losses – $450,000 to include “pain and suffering” is a little silly
Steve brown
at 1:20 pm
How could Remax let something like this happen? Anyone knows that there has to be full discloser on a crime like that when you purchase a house. If the sales lady wasn’t told about the situation, that’s her problem. A simple google search of the address would have disclosed everything. I don’t think the full 450,000 is called for, but there should be a full refund of the purchase price. Even with lawyers helping, you have to worry about getting screwed over.