If you've found the house of your dreams, you may be one of those stalwart sorts who isn't particularly bothered by the fact that someone has died there. On the other hand, you might be sensitive enough that it’s a deal-breaker for you. California understands – to an extent. The state's law requires disclosure of these issues by both sellers and lessors in real estate transactions, but it also leaves a few loopholes. You may never be sure you know the truth unless you ask, and even that is no guarantee.

Disclosure Disclosure involves coming clean about an issue regarding the property that might adversely affect its value or sale. It's commonly associated with structural issues, such as lead-based paint or a cracked foundation. The legal term for what sellers and lessors must disclose is "material," as in "material facts" or "material defects." Material means that if you knew about the fact or defect, you would no longer want the property, or – at the very least – you wouldn't be willing to pay as much for it.

Three-Year Rule Under California Civil Code Section 1710.2, if someone dies on the property, it's a material defect – but only if the death occurred within three years of the date you make an offer to purchase or rent the home. Technically, if the property was the location of a mass murder in 1975, the seller, lessor, agent or broker does not legally have to volunteer the information.

Exceptions CCCS 1710.2 makes an exception for deaths caused by acquired immune deficiency syndrome. Federal law classifies AIDS as a disability, so disclosure of someone's death due to this cause is considered discriminatory. California law also provides that if you actually ask the seller or lessor about deaths that may have occurred on the property, the owner can't lie. The California Association of Realtors recommends that their agents come clean if questioned, no matter how long ago the death occurred. This doesn't hold true for AIDS-related deaths, however.

Penalties You have recourse if you purchase or rent the property, move in, then find out later that someone died in your home within the last three years. California allows you to file a lawsuit against the seller, lessor, his agent or broker – or even your own agent or broker broker – for failure to disclose. Typically, these lawsuits seek recompense for the difference in price between what you purchased or leased the property for, and what it would have been worth if the seller had disclosed the death. The problem, of course, is that a material defect such as a death isn't as quantifiable as one that concerns a physical defect. This isn't to say that you can't identify what the property might have been worth had the death been disclosed, but you may need the help of a professional.