Whenever I come across IC 32-21-6, I have to stop and read it. If nothing else, the title “psychologically affected properties” is unusual. Then, when you get into it, the statute is pretty random.
It defines a “psychologically affected property” as real estate where:
1) an occupant had HIV; or
2) where an individual died; or
3) the site of a felony, criminal gang activity, discharge of a firearm involving a police officer, or illegal manufacture of a controlled substance.
If a prospective purchaser or tenant asks directly, the owner or owner’s agent has to disclose these events. But if the prospective purchaser or tenant doesn’t ask, there is no requirement to tell. There does not seem to be a penalty attached for failure to disclose under the statute.
What a bigoted and useless law. I can’t believe such discriminatory language belongs on the books. Since HIV can’t live outside the body for more than a few hours, there is ZERO benefit from this law. Perhaps it would be more useful to require disclosure of diseases that can live outside the human body for a length of time. MRSA anyone? How about TB? Looks like this law was just approved in 2002. Surely by 2002 we understood HIV enough to realize that this provision is merely discrimination, and nothing more.
What about ghosts?
I remember that one. I remember wondering at the time how they managed to leave out Satanism.
Not sure the true impact of this law is seen in this discussion. The distinction I make is that the seller is not under any obligation to come forward with fact about a stigmatized property, but, in response to a direct disclosure is only limited in not making false statements – So, the seller can simply refuse to respond to such questions and face no liability.
Not a very useful section of code, but Indiana, like many states across the country passed in in reaction to a California case where the sellers were held responsible for failing to disclose the fact that the prior occupants had been murdered, something that could not be determined by a physical inspection of the property (a latent defect), but something the community certainly knew, hence greatly impacting the value of the property.
So, basically, the statute is a preemptive block of buyers trying to get out of purchases . . .
As an attorney and broker in Indiana, I must disagree with your analysis that an owner or agent must disclose that a property is psychologically affected if asked. Here is the actual Indiana law.
IC 32-21-6-5 Disclosure not required
Sec. 5. An owner or agent is not required to disclose to a transferee any knowledge of a psychologically affected property in a real estate transaction.
As added by P.L.2-2002, SEC.6.
IC 32-21-6-6 Refusal to disclose; misrepresentation
Sec. 6. An owner or agent is not liable for the refusal to disclose to a transferee:
(1) that a dwelling or real estate is a psychologically affected property; or
(2) details concerning the psychologically affected nature of the dwelling or real estate.
However, an owner or agent may not intentionally misrepresent a fact concerning a psychologically affected property in response to a direct inquiry from a transferee.
An owner or agent may refuse to answer a direct question. They may not, however lie. For example, if a property is psychologically affected and a potential buyer or his agent asks if it is, the owner/agent may respond by saying “I refuse to answer your question.” There has been no law violation. But if the question is answered with “No,” a misrepresentation has occurred, and there is potential liability. Logical analysis leads to the conclusion that a refusal to answer truly means that the property is psychologically affected. Now it is up to the buyer to research the issue and determine whether to proceed.
As to the comment about the law being bigoted…I completely agree with respect to the HIV inquiry. Here is the actual language:
IC 32-21-6-3 “Psychologically affected property” defined
Sec. 3. As used in this chapter, “psychologically affected property” includes real estate or a dwelling that is for sale, rent, or lease and to which one (1) or more of the following facts or a reasonable suspicion of facts apply:
(1) That an occupant of the property was afflicted with or died from a disease related to the human immunodeficiency virus (HIV).
(2) That an individual died on the property.
(3) That the property was the site of:
(A) a felony under IC 35;
(B) criminal gang (as defined in IC 35-45-9-1) activity;
(C) the discharge of a firearm involving a law enforcement officer while engaged in the officer’s official duties; or
(D) the illegal manufacture or distribution of a controlled substance.
The HIV provision violates state and federal Fair Housing laws, HIPAA, and several others. I have heard for several years that the legislature is going to remove that provision of the law…but it hasn’t happened yet. Ridiculous.