Stigmatized properties are those properties that society has branded undesirable because of events that occurred there. Stigma is the continuing negative association with or feeling about the property. Typically, the stigma is a criminal event such as homicide, gang-related activity, or a tragedy such as suicide. Properties have even been stigmatized by rumors that they are haunted. Because of the potential liability to a Licensee for inadequately researching and disclosing material facts concerning a property’s condition, Licensees should seek legal counsel when dealing with a stigmatized property.

Article 15 of the Real Estate License Act of 2000 states that in dealing with specific situations related to disclosure:

  • “No cause of action shall arise against a Licensee for the failure to disclose that an occupant of that property was afflicted with HIV or any other medical condition or that the property was the site of an act or occurrence which had no effect on the physical condition of the property or its environment or the structures located thereon.”
  • “No cause of action shall arise against a Licensee for the failure to disclose a fact situation on property that is not the subject of the transaction.”
  • “No cause of action shall arise against a Licensee for the failure to disclose physical conditions, located on property that are not the subject of the transaction, or do not have a substantial adverse effect on the value of the Real Estate that is the subject of the transaction.”