In 1989, Jeffrey Stambovsky, a Manhattan transplant bought Helen Ackley’s house for $650,000.
Stambovsky not aware of the home’s reputation for being haunted first heard the news from a neighbor, after he and his wife moved in. He professed he did not believe in ghosts.
But he was disturbed that Helen and the realtor had not mentioned this information. He felt the notoriety of a haunting could potentially affect the home’s value.
Later, when his pregnant wife heard the news, Jeffrey decided for her comfort they should not have to stay in a place that made her nervous. Nor should they be expected to put their life savings into the home.
He filed a lawsuit against Helen and Ellis Realty for “fraudulent misrepresentation.” He lost his first suit in a lower court, it sided with Helen Ackley citing caveat emptor or buyers beware.
Stambovsky then appealed his case to the appellate division of the New York Supreme Court in 1991 in front of a panel of 5 judges. In a narrow 3 to 2 decision Jeffrey won.
Whimsically, Justice Israel Rubin, who wrote the decision declared, “That Helen Ackley had promised the Stambovsky’s that the property would be vacant when they took possession, which was obviously not true.”
The court based their decision on the fact that buyers beware did not apply in this case for how does one inspect a house for ghosts. They also cited the fact that Helen had deliberately publicized her house as being haunted so she owed the buyer no less.
|Helen Ackley at age 77 before her death.|
They did not find fraud on Helen’s part but considering the history of her published comments she could not deny the property was haunted—so as a matter of law, the house was haunted.
|Excerpt of dissent.|
Stambovshy was allowed out of his contract and his down payment of $32,000 was returned.
The next buyer of this LaVeta Place home on the Hudson River sold it for $900,000, a fair market value. None of the 3 subsequent owners of the home experienced paranormal activity.
The Stambovsky v. Ackley decision is considered historic because of its impact on New York and several other states' laws when it comes to property that is stigmatized.
It varies from state to state but most, including New York now have statutes on their books that the seller does not have to disclose ghostly activity to prospective buyers.
The one failsafe to this is if the prospective buyer asks, then the seller does have to tell the truth about a possible haunting.
In Part l of Stambovsky v. Ackley: Notoriety Backfires, the hauntings the Ackley family experienced over many years are described.