When looking for a potential home, we tend to focus on the legal and financial processes. And rightly so! But there’s an unspoken rule, or rather, homebuying tip, that many don’t remember to perform.
Check on the history of the property! Not so much the property's transaction history (though that’s important too), but the history of the previous occupants if buying subsale, or the history of the land if buying a brand new development.
What defines a haunted house?
A haunted house as we know it is very straightforward - a property where there are purportedly supernatural activities.
But this is very hard to determine and quantify, as perceived “hauntings” have no standing in the eyes of the law.
That figure you thought you saw staring at you in the corner of your bedroom? Perhaps you were only dreaming.
Therefore, a haunted house can be defined as a property both residential or commercial where a death had previously occurred.
There’s actually a category for properties like these. It’s called stigmatised properties.
Stigmatised properties are those which may deter buyers, due to certain "out of the ordinary" reasons which are unfavourable. These are the six sub-categories of stigmatised properties:
Properties with criminal stigma are those which were previously used to house illicit criminal activities. Some good examples? Drug dens and brothels.
One of the methods which debtors flee from debt collectors is by moving their place of residence, and moving often.
The debt collectors, of course, might not realise this straightaway. And they’ll end up harassing the new owners! This is especially prominent for Malaysian properties as loan shark culture is rife.
Minimally stigmatised properties are those which may only be seen as stigmatised by a select few.
Say, certain conditions may make the property unfavourable to only a niche religious group, but not the others. The value of these properties are therefore less affected.
The term 'phenomena' here refers to the supernatural type – not the weather. Haunted houses fall under this category.
Houses where previous occupants killed themselves or were murdered are especially touchy, and are very difficult to sell.
There’s even an entire website dedicated to mapping out the location of such stigmatised properties!
Publicly stigmatised properties are the ones which have stigmas known to pretty much everyone.
It may be due to a haunting or a famous celebrity’s previous home. But ask your next-door neighbour’s aunt’s childhood friend, and she’s probably heard of it before.
What are the effects of such hauntings on a property?
In 2007, businessman Anwar Rashid moved into a £3.6 million 52-room mansion in the UK. From the very day they moved in, they were plagued non-stop by hauntings.
In October a year later, the property went up on the market again. This time – for £1 million less.
As you can see, the effects a haunting can have on a property are damaging. More specifically, through these 3 ways:
- Devaluation of property
- Reduced tenancy
- Lower rental yield
1) Devaluation of property
A lot of different factors can come into play with regards to affecting a Malaysian property’s resale value. We cover that in this article here, but hauntings can render a property almost impossible to sell.
If a haunted house’s other attractive features such as its close proximity to LRT stations aren’t enough to dull the impact of a haunting, what else is there for a seller to do than lower the price?
2) Reduced tenancy
Of course, tenancy will be affected too. Just cause they’re renting and not buying, doesn’t mean they don’t care!
Here, superstitions and beliefs (both religious and cultural) guide the decision-making process for many.
To take the concept of Feng Shui as an example, units directly facing the elevator are unfavourable as they trap all kinds of unwanted energies.
3) Lower rental yields
As a result, the seller of the haunted house will also see lower rental yields. Rental yield is the return the landlord will be able to make by renting out the property. This is how it’s calculated.
Average gross rental yield for a condominium unit in the Klang Valley is averaged at 4.5% annually. But for a haunted one? That figure might drop to a measly 1-2%.
Who would actually buy a haunted house?
It’s not all doom and gloom though. Haunted houses do attract a certain crowd - mainly property flippers and budget-seekers.
1) Property flippers
When the price of a Malaysian property plummets, that’s where you’ll find flippers. Property flippers buy a property and resell it for a profit within the shortest time period possible.
And it’s precisely such “unwanted” Malaysian properties that attract them the most, since they hold the potential for higher Return On Investment (ROI).
We’re all on the lookout for a good deal. But if the deal in question comes with the added “freebie” of an unwanted spirit... that might not be so worth it anymore.
Of course, there are many who don’t have the luxury of choice when it comes to a roof over their heads. In which case, a property is still a property.
For example, in the sorry state of Hong Kong’s property market for example, homebuyers are resorted to buying taboo haunted properties at 10-20% off.
But agents have to reveal this kind of info to buyers... right?
Every country has its own laws in place to govern this. But when in Malaysia? That’s unfortunately a no.
Technically, it’s not illegal if you unknowingly moved into a house with a dark, ghostly past, but your agent didn’t tell you.
What your agent IS obliged to tell you however, are all the material defects within the property like faulty wiring and mouldy cupboards.
But as always when it comes to matters related to the law, it depends! So, does that mean you're completely on your own? Not quite...
There's the Duty of Care Principle
The Duty of Care very adequately falls under the Negligence Law. What this is, is the obligation of a person or body to conform to a certain reasonable standard of conduct.
And yes, this still applies even if it’s not explicitly stated beforehand!
We’ll use the example of the “snail in the bottle” case - Donoghue v Stevenson  UKHL 100.
Mrs Donoghue drank a bottle of ginger beer in a cafe, but upon drinking, found the remains of a dead decomposed snail inside.
She fell ill and sued the ginger beer manufacturer, Mr Stevenson. It was held that as the manufacturer, Mr Stevenson owed a Duty of Care to his customers that the ginger beer they were drinking would be safe for consumption.
In other words, he was careless. Plain and simple as that.
Basically, don’t do anything that could foreseeably injure someone. Even if it wasn’t done out of ill will or deceit, it’s still your responsibility.
To put this law in the context of a haunted house, let's say the buyer received a heart attack and suffered psychological effects after finding out on his/her own that there was previously a murder in the property.
It would then be held that the real estate agent has breached his/her Duty of Care as a responsible agent.
Hold on, there's still something called "caveat emptor" though
The law likes to use a lot of fancy Latin words, and one of these is caveat emptor (good thing you’ve got us to explain it to you, though!).
Caveat emptor is a Latin term which means “let the buyer beware”.
The full statement actually translates to “Let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party.”
This means that the buyer holds the responsibility to make sure the property that is to be bought is of acceptable condition.
After the purchase is confirmed, the seller no longer holds the responsibility for any defects etc.
And this is true for any contract, agreement or purchase. Don’t be ignorant! Carry out as much research as you possibly can.
Even a quick internet search will reveal numerous news pieces, such as this particular condo in Mont Kiara that was hit with not just one, but THREE tragic deaths so far!
You need to protect yourself, because there isn’t any guarantee the law will protect you, especially in cases of “as is, where is” properties.
Lesson Learnt: Ask the Right Questions!
So while it’s not automatically illegal if your agent didn’t tell you about the “unwanted residents” in your property, you may be able to sue in certain cases. It’s very situational though.
To be safe, agents should hold integrity at the core of their work and inform potential buyers, no matter how badly it may affect the sale!
Buyers on the other hand need to be responsible too. Due diligence is a thing, guys! But if you're lost on what to do and where to begin, you can start off by asking the neighbours.
It’s that simple, really. Make a quick trip to the property in question and ring the door bells of the people in the vicinity.
Just introduce yourself, mention that you’re looking at the property, and ask if they knew the previous occupants personally etc.
On the plus side, this also gives you a perfect opportunity to get a glimpse at who your potential new neighbours may be and what they’re like.
If it's a brand new property, you can hire a lawyer to help you with the title search at the Land Office - it'll allow you to find out the history behind that piece of land (hopefully it wasn't a former burial site)!
What else should you know before buying a Malaysian property? We’ve got plenty more guides here!