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Disclosure of a Nuisance is Necessary and Can Affect Value

Written by on Monday, 01 April 2013 7:00 pm

Neighbors can be a nuisance. Being neighbors, therefore, sometimes we can be a nuisance. Most of our and their nuisance-causing behaviors are sporadic, transitory, and often unintentional. They constitute one of those wrinkles in life with which we can all put up. Regrettably, though, some nuisances are persistent. When that happens it diminishes not only our enjoyment of our property, but also its value.

Not surprisingly, the definition of what is a nuisance is broad and vague. California Civil Code §3479 says in part, "Anything which is injurious to health... or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property... is a nuisance."

Some nuisances are public, meaning that they may affect an entire community (right; now we have to define community). Whereas others may be private, affecting only one or a small group of persons. Someone who has polluted a waterway may have committed a public nuisance; while your neighbor's act of draining motor oil onto your property is likely a private nuisance. Some nuisances may be both public and private. The emission of noxious odors by a manufacturing facility might be a public nuisance in that a whole neighborhood might be affected; but it might also be private with regards to adjacent property owners who were more seriously affected, e.g. by having a health hazard, not just an annoyance.

Clearly, one person's nuisance may not be another's. The sound of night-time pony league baseball games might be music to the ears of one person; whereas to others it would be an annoying bother.

This much is definite: if some activity or behavior clearly constitutes a nuisance in a particular neighborhood, or part thereof, then it must be disclosed to a potential purchaser. This is where the diminishment in value comes in.

This issue was specifically addressed by a California Appellate court in the case of Alexandar v. McKnight (4th Appellate District, 1992). The trial court had found that the defendant's behavior (which included operating a noisy wood chipper business from their home, late night basketball games, and parking too many cars on the property) constituted a nuisance; and that the existence of such nuisance(s) would have to be disclosed on the mandatory disclosure form (the TDS, Transfer Disclosure Statement) required by California law. Such disclosure, the trial court found, would have a negative effect on the market value of the property.

Although, for technical reasons we don't need to explore here, the Appellate Court did not uphold the damages found by the trial court, it did concur with the principal that disclosure of the nuisance would negatively affect the value of the property. "It is reasonable to assume that a prospective buyer would not be anxious to become involved in a neighborhood dispute, and that all things being equal, would prefer to live in a more collegial and hospitable neighborhood. In economic terms this reluctance would be reflected in a reduced purchase price. The buyer willing to assume headaches and other emotional discomfort in purchasing a residence will undoubtedly expect a discount for doing so."

Frequently, a neighborhood nuisance will not be within the capability of a buyer to discover using reasonable efforts. Therefore, much relies upon disclosure; and disclosure may result in a diminished value. For this reason, it is a good idea to try to nip nuisances in the bud, though, of course, in a pleasant and neighborly way. No one really likes to get involved in such matters; but better the owner now, than the buyer and his lawyer later.

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  About the author, Bob Hunt

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