Abstract
Since the late 1980s, a majority of states have enacted statutes protecting nondisclosure of stigmas affecting property in residential real estate transactions. While many of these statutes have elements in common, there are substantial differences with respect to the set of stigmas covered, the duty to answer direct inquiries concerning particular stigmas, the relevance of time elapsed since the stigmatizing event, and whether brokers, sellers, or both are protected. This Comment argues that much of this variation is due to some legislatures’ justified reluctance to fully embrace the traditional arguments in favor of stigma statutes. Assessing the validity of arguments focusing on stigma statutes’ capacity to promote efficiency and rationality, this Comment suggests problems for both. The efficiency argument is criticized for exaggerating the stability and other virtues of “hard- edged” rules and for underestimating the potential for consistent application of more flexible rules in this area. The rationality argument is criticized for its unrealistic notion of the potential for legislation to influence people’s beliefs, particularly with respect to stigmas associated with death and disease. This Comment recommends an alternative approach by which nondisclosure of most stigmas is protected because the seller’s interest in maintaining her privacy or in ridding herself of a property at which she has suffered some calamity outweighs the puzzling but real harm to buyers concerned about such stigmas.
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