Psychologically Affected Property - What are sellers required to disclose only if asked?

A psychologically affected property is a property for sale or rent where one of the following has occurred:

1. Someone died on the property,

2. criminal gang activity took place on the property,

3. discharge of a firearm involving law enforcement while engaged in official duties occurred at the home,

4. illegal drugs or controlled substances were manufactured on or sold from the residence,

5. or a felony occurred on the property.”

I encountered this term during the course to earn my license and found it really interesting. This is a list of situations that fall into an odd category for Indiana: they are not required to be disclosed by the owner when selling or renting EXCEPT if the prospective purchaser or tenant directly asks the owner or agent representing the owner if the property is psychologically affected (or if any of the individual situations have occurred).

You’re probably thinking, aren’t most properties listed with a seller’s disclosure form? You are correct, but none of the items listed above are on that form. The manufacturer and/or dumping of waste related to methamphetamine is on the seller’s real estate disclosure, but no other illegal drugs or substances are mentioned. None of the other situations listed above are mentioned on the form either.

This term is sometimes used interchangeably with “stigmatized property” but stigmatized and psychologically affected are not the same. Psychologically affected property is the specific term used under Indiana’s code on property. This does start to get into real estate law, and I am not a lawyer. So, for further details, I would refer to your personal attorney that specializes in real estate law.

If you’re curious if a property is psychologically affected, it’s likely you can obtain the answer by searching the properties address – surely there was a police report or other news story covering the incident. But, if you are concerned, you should ask, because the owner and agent representing them are obligated to answer truthfully, if they are aware.

One of the main purposes for me starting White & Walnut is to educate people on what questions to ask. This is not common knowledge and it’s difficult to determine where to get reliable information on real estate topics. Continue to follow White & Walnut on Facebook, Instagram, TikTok, and subscribe directly to the blog via email to receive relevant real estate information.