Death in a Home- Insurance Claims History
This article authored by: Catherine Hallberg
This question was posed to the AARONLINE HOTLINE and it demonstrates how convoluted real estate transactions can get:
The previous owner of the property passed away in the master bedroom. The son inherited the home shortly thereafter. Apparently, the deceased was not discovered until eight days after he passed away. Consequently, the son filed a claim with the property insurance policy for death remediation and cleanup. The damage and remediation is now identified in the insurance claims history . The remediation and cleanup was extensive and the subject of the damage was identified as “physical peril.”
In selling the property, is the son required to disclose that a death occurred in the property? If not, is the son required to disclose the damage and remediation? Finally, is the son also required to provide the insurance claims history?
Pursuant to A.R.S. § 32-2156, a seller and broker are not required to disclose that the property was the site of a natural death, suicide or homicide. In other words, the seller or broker cannot be liable for failing to disclose that the property had been the site of a human death. Id. In this case, the father passed away naturally in the master bedroom of the property. As such, the son and/or the broker are not required to disclose this fact to a potential buyer.
With respect to the insurance claims history, Section 4b of the purchase contract provides, in pertinent part, the seller must provide to the buyer a five-year insurance claims history. In this case, the son is contractually obligated to provide the insurance claims history. The insurance claims history identifies the subject of the remediation as “physical peril.” Despite the subject of the remediation being identified, the son is still contractually bound to provide the insurance claims history.
Arizona REALTOR® Magazine – October 2013 | Disclosure
Here’s my thought on this issue:
Although the Seller isn’t obligated to disclose the death, the insurance claims history will no doubt evoke questions from potential buyers. In this instance, it might be wise to offer an explanation as the buyer will most likely ask the neighbors who will be more than happy to fill them in. However, by law, you don’t have to explain. What would you do?
Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Send Rob and Catherine an email for a fast response to your questions; for an even faster response, Call (520) 407-8667.