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27 Wake Forest L. Rev. 689 (1992)
AIDS, Ghosts, Murder: Must Real Estate Brokers and Sellers Disclose

handle is hein.journals/wflr27 and id is 699 raw text is: AIDS, GHOSTS, MURDER: MUST REAL ESTATE BROKERS AND SELLERS DISCLOSE? Paula C. Murray* INTRODUCTION In the last few years, two seemingly unrelated issues in our legal sys- tem have surprisingly become intertwined. The first development involves the acquired immune deficiency syndrome (AIDS) epidemic and the legal system's efforts to deal with that crisis.1 The second significant develop- ment, though not as widely publicized, is the increasing liability of both a real estate broker and a seller of real property to a buyer for many non- structure related misrepresentations.2 In perhaps one of the most unique legal developments in recent history, AIDS and a real estate broker's lia- bility have become related. This relationship illustrates a problem facing brokers in the 1990's-liability for information unrelated to the physical characteristics of real estate or to the financial transaction. Broker liability has increased at nearly an exponential rate as many state courts and consumer protection statutes require a broker to disclose any information that materially relates to a buyer's decision to purchase property.3 Many buyers feel that knowing an inhabitant of a house suf- fered from AIDS is material information in the home-buying decision. The lack of scientific evidence to support the belief that a person can contract AIDS from a physical structure is irrelevant to buyers who hold this belief-they still want to know. Although buyers desire this informa- tion, the federal Fair Housing Act5 (Housing Act) prohibits brokers and sellers from disclosing such information. The association of AIDS with the duty to disclose material defects concerning real property vividly illustrates the tremendous expansion of seller and broker liability. Likewise, the duty of a seller and real estate * Associate Professor of Business Law, Graduate School of Business, University of Texas at Austin. B.A. 1977, Baylor University; J.D. 1980, University of Texas. 1. See Marlene C. McGuire & Robert N. Gee, AIDS: An Overview of the British, Aus- tralian, and American Responses, 14 HOFSTRA L. REv. 107 (1985). 2. See generally Joseph M. Grohman, A Reassessment of the Selling Real Estate Bro- ker's Agency Relationship with the Purchaser, 61 ST. JOHN'S L. REv. 560 (1987); Paula C. Murray, The Real Estate Broker and the Buyer: Negligence and the Duty to Investigate, 32 VILL. L. REV. 939 (1987). 3. See, e.g., Deceptive Trade Practices-Consumer Protection Act, TEx. Bus. & CoM. CODE ANN. § 17.46(b)(23) (West 1987 & Supp. 1991). 4. See Home Phobia Haunts Realtors Who Fear the Stigma on Properties of AIDS Victims, WALL ST. J., Apr. 25, 1991, at 1. 5. For a discussion of the federal Fair Housing Act, see infra notes 79-112 and accom- panying text.

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