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Local Incident Raises Issue Of AIDS, Sales

A recently publicized local case in which a caregiver stole more than $30,000 from a man dying of AIDS brought questions from real estate agents and brokers after the estate was settled.

Did the agents have to disclose to potential buyers of the home that the man had died from AIDS? Did they have to disclose that a felony had been committed in the home?

In this age of When in Doubt, Disclose, we find an aberration with no clear solution in sight.

According to the Department of Housing and Urban Development, it would be a violation of the Fair Housing Act for agents to make unsolicited statements saying that a current or previous owner or occupant has AIDS or died from AIDS. And, according to HUD, agents should decline to respond to direct questions regarding occupants and AIDS.

The National Association of Realtors has basically adopted the same stand - that federal housing laws preempt any interpretation of state disclosure statutes that would impose a duty on an agent to investigate and disclose whether an occupant of a dwelling has AIDS.

The federal Fair Housing Amendments Act of 1988 prohibits discrimination in the sale, rental and financing of housing based on race, color, sex, handicap, family status or national origin. AIDS is a protected health handicap. However, the federal law has competed against state court decisions in cases where an owner's AIDS-related condition has been considered a ``material fact.''

The main question in most real estate fraud and misrepresentation cases is whether the omission of information, or a statement made, is a material fact. A ``material fact'' is loosely defined as something that could affect the price somebody would pay for a service or product.

A very complex, 1983 California court decision held that AIDS could be construed as material fact if the plaintiff could prove a loss of market value attributed to the property's social stigma because of the owner's AIDS condition.

``I don't see AIDS as a material fact,'' said Bob Hanke, attorney in the state's Department of Licensing. ``There's no concrete evidence that the infection could be passed along to the new owner. Agents who make statements to the buyer about AIDS could be putting the seller at risk.''

Medical experts point to overwhelming scientific evidence that AIDS cannot be contracted by casual contact, and that any fear of buying a home or renting an apartment from someone with AIDS is unwarranted.

``It unequivocally and absolutely does not increase the risk of infection to be in the same environment with a person who has AIDS or who has died from AIDS,'' said Hunter Hansfield, director of the Sexually Transmitted Diseases Control Program for the Seattle-King County Health Department. ``Unless two people are having sex together, exchanging bodily fluids or using the same hypodermic needles, the risk will not increase.

``Even in cases where the caregiver has used the same toothbrush and razor blades, we did not document infection.''

For the past four years, the Puget Sound Multiple Listing Association has required all sellers to complete a Residence Property Information Form (commonly known as Form 17) when a property is listed for sale. This was a move to help protect sellers and agents from lawsuits resulting from sellers not disclosing a home's defects and shortcomings. Questions on the form are about basic sewage, heating, repairs, termites, boundaries and neighborhood conditions.

The form includes a question about death. It originally stated, ``Has anybody committed suicide or been murdered or raped in the house?'' The form was revised last fall and the question now reads: ``Has anybody committed suicide or died from other than natural causes?''

Although the forms are allegedly required when a property is listed for sale, many forms are never completed. Some agents simply do not take the time to see that they are filled out; others are confused by the wording. Heart disease, despite what we eat and smoke, is a natural cause. So are cancer, AIDS and pneumonia. Not all sellers, buyers and agents understand that.

The form is not a help but a hindrance. It is compounding the no-win situation agents already are in - disclose AIDS and be faced with an invasion of privacy issue; fail to disclose and face misrepresentation.

The HUD and National Association of Realtors policy of not addressing AIDS ``one way or the other'' may work now for the handful of cases on the books. But as the number of AIDS cases rises, the disclosure issues and questions will become common.

``No comment'' is no way out. HUD and the private real estate community must help educate its agents and clients about AIDS and other diseases.

Tom Kelly is a private real-estate consultant. His column runs every Sunday in the Home/Real Estate section of The Times. Send questions and comments to Tom Kelly's Column, P.O. Box 70, Seattle, WA, 98111.