New York Stigmatized Property Disclosure: What Agents Must Not Reveal

New York Stigmatized Property Disclosure: What Agents Must Not Reveal

In every licensing class, there’s a moment when students do a double-take.

We cover disclosure rules, and someone asks:

“But wouldn’t a buyer want to know if someone died in the house?”

It’s a fair question. It’s also where New York real estate law draws a bright line between:

• Physical defects that must be disclosed, and
• Psychological or “stigmatizing” facts that generally do not have to be disclosed

Even more surprising: disclosing certain stigmatizing information without the seller’s permission can create problems for an agent, including potential fiduciary-duty issues and unnecessary harm to property value.

What Is a Stigmatized Property?

A stigmatized property is one where a buyer’s perception may be affected by events or associations, even though there is no physical defect.

Examples often include:

• A homicide, suicide, or other death associated with the property
• A felony or serious crime connected to the property
• Prior occupancy by someone with HIV/AIDS or another illness unlikely to be transmitted through occupancy
• Reputation or widely known “stories” about the home

New York RPL § 443-a: The Rule That Surprises Students

New York addressed stigmatized property directly in Real Property Law § 443-a.

Under this statute, it is not a material defect that:

• A property is or is suspected to have been the site of a homicide, suicide, other death, or a felony, or
• A current or former occupant is or was suspected to be HIV-positive, diagnosed with AIDS, or had another disease highly unlikely to be transmitted through occupancy

The law also provides strong protections:

• No cause of action arises for failure to disclose these facts
• Failure to disclose is not grounds for discipline against a licensed agent or broker

Where Agents Get Into Trouble: “Full Disclosure” vs. Fiduciary Duty

Many newer agents think the safest approach is to disclose everything they know. But agency law requires something more precise.

A real estate agent is an agent of the principal and has fiduciary duties, including loyalty and confidentiality. Sharing stigmatizing information without permission can:

• Breach confidentiality
• Harm the seller’s negotiating position
• Needlessly reduce value or buyer interest
• Create liability where none existed

“But What If the Buyer Asks?”

New York law gives buyers a pathway. If stigmatizing information is important to a buyer’s decision, the buyer may submit a written inquiry during negotiations or with a bona fide offer. The seller may choose whether or not to respond.

Megan’s Law and Sex Offender Registries: Why Agents Don’t “Verify the Neighborhood”

New York courts have held that brokers have no obligation to search state sex offender registry records. A buyer’s broker should, however, advise clients that the registry is available for public inspection.

Important resource: Buyers may review the official New York State Sex Offender Registry here.

Why this matters in the real world: registry locations can change frequently. Addresses update when individuals move, when compliance status changes, or when records catch up. A statement that’s accurate today may be inaccurate tomorrow, and agents are not in a position to monitor or guarantee ongoing accuracy.

The practical approach is:

• Don’t investigate or represent registry information as fact
• Do point buyers to official public resources
• Let buyers conduct their own due diligence if it matters to them

Source Attribution

This article references instructional material and statutory language related to New York Real Property Law § 443-a , including disclosure obligations for stigmatized properties, as well as publicly available information maintained by the State of New York.