Introduction

The expression xiongzhai (凶宅), rendered here as “stigmatized property,” is not itself a statutory legal term. It arose from folk beliefs and neighborhood stories about ghosts. Because such matters may seem at odds with a society that values scientific reasoning, they were once regarded as falling outside the law’s proper concern.[1]

In recent years, however, real-estate prices have risen sharply. For most people, buying a home requires a substantial financial commitment, while many property owners also depend on rental income.

When a property becomes stigmatized, persistent social aversion may make even the owner unwilling to continue living there. Prospective buyers and tenants may likewise lose interest or offer less, causing the owner substantial loss. These practical effects have brought the legal problems surrounding stigmatized property into focus.

Taiwanese cases involving stigmatized property broadly fall into two groups. The first concerns contractual liability in a sale, including the seller’s warranty against defects in quality, incomplete performance, culpa in contrahendo arising from a failure to disclose, rescission, and revocation based on mistake.

The second concerns tort liability when a suicide causes a property to become stigmatized—for example, when a tenant or third party dies by suicide inside rented premises.

Using Taiwan High Court Taichung Branch Court Civil Judgment No. 19 (2017) as its central case, this article addresses only contractual liability arising from the sale of stigmatized property and surveys the relevant scholarship and case law.

Case Facts and the Courts’ Decisions

Case Facts (First instance: Taiwan Taichung District Court Civil Judgment No. 2598 (2015); second instance: Taiwan High Court Taichung Branch Court Civil Judgment No. 19 (2017))

On April 11, 2013, Party A purchased a house in Taichung City for NT$7.6 million together with the land on which it stood (collectively, the “property”). On July 19, 2012, before that purchase, a person had died by suicide by hanging inside the house and had no signs of life when found there.

In August 2015, Party B purchased the property from Party A for NT$12 million through Parties C and D. After B paid the full price, title was transferred and the property delivered. Of the two intermediaries, only C received NT$300,000 from A: NT$240,000 as brokerage remuneration and NT$60,000 for transaction-related fees.

On September 13, 2015, while cleaning the house, B learned from a neighbor that a person had died by suicide there. B alleged that this was the first time B knew the house was stigmatized; this allegation was not among the facts undisputed by the parties. During the sale, A, C, and D had not disclosed the prior suicide.

B then brought a civil action. Relying on Article 571 of the Civil Code, B argued that C and D had concealed the stigmatizing event while encouraging the purchase, contrary to good faith, and sought the return of NT$300,000 in brokerage remuneration. B also added an unjust-enrichment claim under Article 179.

Under Articles 354 and 359 of the Civil Code, B further asked A to bear warranty liability for the reduction in the property’s market value and sought the return of NT$4 million of the purchase price.

The Trial Court’s Reasoning

The Seller’s Warranty Against Defects in Quality

A “defect” is a deficiency in the thing sold: under ordinary commercial understanding or the parties’ agreement, the thing lacks a value, utility, or quality that it should possess.[2]

The statutory warranty against defects is a form of no-fault liability. As a rule, the seller’s intent or negligence is not an element of liability. The other statutory requirements must nevertheless be satisfied, and exclusions such as those in Article 355 must still be considered.

A homicide or other non-natural death can affect the individual characteristics and market value of real property and may therefore constitute a defect that impairs value. In this case, the death was not remote in time and continued to have a substantial effect on the transaction.

For the same reason, warranty liability ordinarily does not depend on the seller’s intent or negligence, although the other statutory requirements and exclusions such as Article 355 remain applicable. The Ministry of the Interior’s definition of matters to be disclosed does not, by itself, determine whether the seller bears warranty liability.

The Brokers, the Brokerage Contract, and Unjust Enrichment

Article 571 of the Civil Code allows a principal to refuse agreed remuneration when a broker, despite completing the entrusted matter, acts in violation of the broker’s duties and the rules of good faith. It does not give the principal a separate right to recover remuneration already paid. The court therefore rejected B’s claim against C and D for restitution.

B’s unjust-enrichment claim under Article 179 also failed. A payment lacks a legal basis when its legal purpose is absent. Here, the payment was made pursuant to the parties’ brokerage contract. Because that contract had not been lawfully rescinded or revoked, its legal basis remained in place.

Accordingly, whether under Article 571 or Article 179, the court held that B could not recover the NT$300,000 from C and D.

The brokerage and remuneration issues are not central to this article. They were also not disputed on appeal, so they are not examined further here.

The Appellate Court’s Reasoning

Identifying a Stigmatized Property

The trial court did not examine the meaning of stigmatized property in depth. The appellate court described it as a house in which a homicide, fatal suicide, or comparable non-natural death had occurred. Although the house’s ordinary physical use may remain intact, the event can negatively affect perceived residential quality and the property’s market price.

The court noted that Item 11 of Appendix 1 to the Ministry of the Interior’s 2003 amended Model Exclusive Real-Estate Listing Agreement asked whether, during the seller’s ownership, a homicide or fatal suicide had occurred in the building’s exclusive area. The item covered a homicide or suicide resulting in death within the exclusive area—including the principal and accessory structures—where the body remained there, as well as a fatal suicidal act initiated from that area, such as jumping from it. It did not include an attack occurring there when the victim died and the body was left elsewhere.

The Ministry’s reply dated July 24, 2008 primarily explained that a homicide or fatal suicide occurring during the seller’s ownership should be disclosed in the property-condition statement, and clarified the circumstances that count as a homicide or death by suicide for that disclosure.

It did not mean that a property could be considered stigmatized only when the non-natural death occurred during the seller’s ownership. Nor did it mean that the seller would automatically escape warranty liability when an earlier non-natural death reduced the property’s transaction price and therefore impaired its value.

The Seller’s Warranty Against Defects in Quality

The appellate court agreed with the trial court’s definition of a defect and with the principle that warranty liability generally does not require intent or negligence by the seller. It also affirmed the seller’s warranty liability in this case. Because the appraisal used a different calculation, however, the appellate court adjusted the loss in value to NT$2,440,247.

The appraisal methodology lies outside the focus of this article and is not discussed further.

Commentary

What Counts as a “Stigmatized Property”?

“Stigmatized property” is not a statutory term and has no single express legal definition. Its contours can nevertheless be inferred from administrative materials and court decisions in Taiwan.

One administrative point of reference was the Ministry of the Interior’s Model Exclusive Real-Estate Listing Agreement. Item 11 of its property-condition statement asked whether a homicide or fatal suicide had occurred in the building’s exclusive area.

A Ministry interpretation dated July 24, 2008 explained that the question referred to events during the seller’s ownership in the building’s exclusive area, including its principal and accessory structures: a homicide or suicide ending in death there, with the body found there, or a fatal suicidal act initiated from that area, such as jumping from it. Courts have used this criterion in practice.[3]

Under the Ministry of the Interior’s current Mandatory and Prohibitory Provisions of Standard Form Contracts for Existing-Home Sales, Item 2 requires the parties to confirm the Building Condition Confirmation Form. Item 7 asks whether a homicide, suicide, carbon-monoxide poisoning, or another non-natural death occurred in the building’s exclusive area during the seller’s ownership or before it. For the period before ownership, the seller may indicate that no such event has been confirmed, that an event is known to have occurred, or that whether one occurred is unknown. These disclosure items inform transactions and may assist courts, but they are not the sole and fixed legal definition of a stigmatized property. Contract terms and the facts of each case remain relevant.[4][5]

Taiwanese courts have treated homes in which non-natural deaths occurred—including homicide,[6] hanging,[7] charcoal-burning suicide,[8] poisoning by medication,[9] and drowning in a bathtub[10]—as potentially stigmatized because such events may produce strong psychological aversion and reduce willingness to purchase.

Some trial courts,[11] however, have viewed homicide or hanging inside a house as a subjective psychological concern that may fade with time or memory. On that view, the seriousness of the event and the time elapsed must also be considered.

One decision[12] interpreted a contractual reference to a “non-natural death incident” broadly enough to include a natural death when the body remained undiscovered and decomposed for several days.

Location can also affect the analysis. A non-natural death occurring directly inside the house generally supports classification as stigmatized property. By contrast, one decision[13] held that a house was not stigmatized when a traffic accident occurred outside and the body was propelled into the house. The most difficult location disputes involve suicides by jumping from apartment buildings because the place of departure and the place of impact may differ.

One line of cases[14] treats the exclusive area from which a person jumped as stigmatized; if the person landed in another owner’s exclusive area, that area may also be stigmatized. An apartment that was neither the departure point nor the impact site is generally not treated as stigmatized merely because the person jumped from another floor of the same building. Some scholarship adopts the same view.[15]

As to timing, some scholars[16] argue that whether the non-natural death occurred during the seller’s ownership is irrelevant to whether the property is stigmatized.

In the case examined here, the person died by hanging inside the house. Under the Ministry’s interpretation, the cases, and the scholarship discussed above, the house plainly fell within the concept of stigmatized property.

The trial court did not analyze the concept in depth. The appellate court relied on Ministry interpretations and model agreements but held that a non-natural death need not occur during the seller’s ownership for the property to be stigmatized. That conclusion is persuasive.

Contractual Liability in a Stigmatized-Property Sale

If a buyer proves that a non-natural death reduced the property’s transaction value, several potential causes of action may arise against the seller: warranty against defects, incomplete performance, culpa in contrahendo, rescission, or revocation of the buyer’s expression of intent.

The courts in this case focused on warranty liability, so this commentary does the same. The other possible causes of action are discussed through hypothetical applications of the relevant cases and scholarship.

Warranty Against Defects in Quality

The prevailing scholarly view in Taiwan treats warranty liability as a special obligation imposed on a contractual debtor to preserve the equivalence of exchange in an onerous contract and to protect transactional security and trust.[17] Most stigmatized-property decisions have relied on the seller’s warranty against defects, and that doctrine is also the principal focus of the judgment reviewed here.

For historical comparison, sources [18][19] describe the former version of German Civil Code § 434(1): a thing is free from defects when it has the agreed quality at the time risk passes. If no quality is agreed, it is free from defects when it is fit for the use contemplated by the contract or, otherwise, for ordinary use and has the quality usual in things of the same kind that the buyer may expect. The current § 434 instead identifies subjective, objective, and assembly requirements; the following three-stage inquiry describes the older framework discussed by those sources:

1. Subjective standard: first ask whether the thing possesses the qualities agreed by the parties.

2. Semi-subjective standard: if the parties made no express agreement, ask whether the thing is fit for the use contemplated by the contract—that is, the use the parties envisioned.

3. Objective standard: ask whether the thing is fit for ordinary use and has the qualities that a buyer may ordinarily expect under the contract. This stage depends on the expectations of a reasonable average buyer and may include circumstances external to the thing itself.[20]

The Objective Approach[21]

This approach appeared in early German scholarship and case law. It defines a defect by reference to the general characteristics of the relevant class of things. A defect exists when the seller delivers something that lacks a characteristic ordinarily possessed by things of that kind.

For example, a thing is defective if it lacks the ordinary characteristics of its class, such as rotten fruit sold for eating, or if its inherent characteristics conflict with the buyer’s expected use, such as wood that rots when wet being sold for construction in a hot-spring environment.

The objective approach centers on deviation from the general quality of the class and does not depend on the parties’ agreement. Its weakness is that the “ordinary characteristics” of a class must first be identified, and not every thing has an easily defined ordinary standard.

The Hybrid Subjective-Objective Approach[21]

Because the ordinary characteristics of a thing can be difficult to define, scholarship gradually developed a hybrid approach. It first uses the parties’ agreement to identify defects, then supplements that agreement with the ordinary condition required by the objective approach.

Under this view, a defect exists when the delivered thing does not conform to the condition contemplated or agreed in the contract and that nonconformity destroys or impairs its utility or value. Objective standards remain necessary to fill gaps in the parties’ intentions and determine whether ordinary utility is absent or reduced.

The hybrid approach therefore does not reject objective considerations; it assigns them a supplementary role within a different interpretive framework. In this respect, it resembles the staged analysis used in German law.

Article 354(1) of Taiwan’s Civil Code provides: “The seller of a thing shall warrant that the thing sold is, at the time when the danger passes to the buyer according to the provisions of Article 373, free from any defect in quality which may destroy or impair its value, or its fitness for ordinary efficacy, or its fitness for the efficacy of the contract of sale. However, if the extent of the impairment is of no importance, such impairment shall not be deemed to be a defect.” A buyer invoking the seller’s warranty must therefore first establish that the stigmatized property has a legally cognizable defect.

Scholarship and case law divide on whether stigmatized property constitutes a defect. The negative view generally rests on two arguments:

1. A loss of value or utility caused by some circumstance does not automatically make the thing itself defective. The analysis should ask whether the deficiency inheres in the thing rather than treating every adverse consequence as a defect.[22] On this view, a price reduction caused only by a suicide does not constitute a defect in the property.

2. Aversion to stigmatized property is subjective and varies with personal or religious belief. Time, fading memory, or religious rites may reduce or remove the anxiety. It is therefore difficult to say that the property lacks the value, utility, or quality it should possess.[23]

The affirmative view generally relies on the following arguments:

1. Some scholars[16] argue that defects impairing value or utility need not originate in the thing itself. The parties’ subjective understanding comes first, and any circumstance materially affecting value or utility may amount to a defect. Religious belief and the passage of time affect the degree of depreciation, not the existence of a defect.

2. Courts define a defect as a deficiency that, under ordinary commercial understanding or the parties’ agreement, leaves the thing without the value, utility, or quality it should possess.[24] A non-natural death is material information in a housing transaction and may constitute a major transactional defect.[25] If the buyer would not have purchased—or would have offered less—had the buyer known, the property may be treated as defective.[26]

The real disagreement between the affirmative and negative views is therefore whether a defect must be inherent in the thing itself and whether the parties’ subjective understanding should be considered—that is, whether to adopt the hybrid subjective-objective or the purely objective approach.

In my view, current market practice and common experience in Taiwan show that a stigmatizing event ordinarily reduces both willingness to purchase and the price relative to comparable nearby properties. It is therefore difficult to accept the negative view that dismisses the effect as merely personal belief or religious custom.[27]

The objective approach also places substantial weight on “quality” when determining whether value or utility is impaired. Its stricter standard can make it controversial to recognize a defect grounded in broader social understanding.

The hybrid approach, by contrast, lets the parties expressly allocate or exclude the buyer’s concern about stigmatizing events. It allows the buyer to evaluate that concern and reach an agreement with the seller, reducing disputes between individual expectations and social convention.

The hybrid approach does not abandon objective standards. When the agreement is unclear, ordinary expectations can still fill the gap. It therefore retains the strengths of the objective view while respecting private autonomy and avoiding some of the weaknesses of an exclusively subjective analysis. This article accordingly adopts the hybrid approach.

For these reasons, this article treats stigmatized property as potentially defective because it generally commands a lower market price and attracts less buyer interest than comparable property. A defect need not be inherent in the physical substance of the thing. Warranty liability ordinarily does not require the seller to have known of the non-natural death or to have been negligent in failing to discover it; lack of knowledge therefore does not automatically exclude liability. The remaining statutory requirements and exclusions, including Article 355, must still be examined in each case.

The judgment is persuasive insofar as it treated the buyer’s unwillingness to purchase—or willingness to purchase only at a lower price—as evidence of a defect. It thereby adopted a hybrid subjective-objective approach and did not confine defects to the physical substance of the property.

Liability for Incomplete Performance

Suppose the contract expressly states that the house is not stigmatized, but after the contract is made and before delivery the house becomes stigmatized for a reason attributable to the seller. Scholars[15][22] recognize that the buyer may claim compensation under Article 227 of the Civil Code for the pure economic loss caused by the reduction in transaction value. This article agrees.

A harder question arises when the house was already stigmatized when the sale contract was made. One judicial view[28] distinguishes by the time the defect arose: warranty liability and liability for incomplete performance may overlap only for defects arising after formation, while a pre-existing defect may be pursued only under the warranty rules.

In this article’s view, the text of Article 227(2) alone does not support the conclusion that incomplete-performance liability is unavailable for a defect existing before contract formation.

Moreover, where a specifically identified thing is sold, the warranty rules principally allow rescission or a reduction of the price under Article 359 and damages under Article 360; they do not provide a right to cure. Article 355 also provides that the seller is generally not responsible if the buyer knew of the defect when the contract was made. The same applies when the buyer remained unaware through gross negligence and the seller did not guarantee freedom from the defect, unless the seller intentionally concealed it. These limitations may make the warranty claim less favorable to the buyer.

It is therefore unpersuasive to make contract formation the dividing line. Incomplete-performance liability should also be available for a defect that existed before formation.

The warranty remedies are subject to the shorter periods in Article 365, whereas incomplete-performance claims are subject to the longer general period in Article 125. Because the two claims rest on different legal bases and may coexist independently, their prescriptive periods should be calculated separately.

Culpa in Contrahendo and the Scope of the Duty to Disclose

Beyond warranty liability, another question arises when the house was already stigmatized at formation—or when other information material to the transaction exists, such as a nearby cemetery[29] or a worker’s fatal fall during construction.[30] Does the seller have a duty to disclose? If a negligent failure to disclose occurs, can it constitute culpa in contrahendo under Article 245-1 of the Civil Code?

During negotiations, each party must appropriately explain circumstances materially relevant to the other party’s decision. The scope of that duty depends on good faith and should account for circumstances that may prevent the contract from taking effect, the nature of the subject matter, and factors important to the counterparty’s decision.[31] Given the continuing influence of traditional beliefs and ghost lore in Taiwan, the duty should not be confined to whether a property satisfies a particular definition of “stigmatized property.” It should extend to other information material to the housing transaction even if that information would not, by itself, place the property within that label.

A stable line of decisions has held that culpa in contrahendo applies only when the contemplated contract is ultimately not concluded. Under that view, a buyer who completes the purchase cannot rely on Article 245-1 to recover the loss in transaction value.

This article takes a different view. Culpa in contrahendo addresses misconduct during the precontractual stage, and its relevance should not depend entirely on whether a contract was later concluded. If the seller failed to disclose that the property was stigmatized or withheld other material information, the buyer should still be able to claim reliance damages under the provision.

Rescission of the Contract or Revocation for Mistake

The courts in this case did not address the issue, but suppose a buyer purchases a house under the mistaken belief that it is not stigmatized. Can the event be treated as an essential quality in trade, or as a defect, so that the buyer may revoke the expression of intent or rescind the sale?

The affirmative view reasons that a non-natural death inside a house is material information in the housing market. If buyers would decline to purchase upon learning of the event, it may constitute a material transactional defect.[32]

Some scholarship[15] likewise takes the affirmative view. A house associated with a non-natural death differs psychologically and in market acceptance from comparable property in the same location and environment. It may therefore constitute a defect under Article 354, allowing the buyer to invoke Article 359 to rescind the contract or seek a reduction of the price.

The negative view[22] characterizes the buyer’s belief that the property was not stigmatized as a mistake in motive. It argues that a legally relevant quality of the thing must be a factual or legal relationship affecting use and value, not merely market price, and that allowing revocation would undermine transactional security.

In my view, buying a home today involves a substantial sum, and ordinary social understanding suggests that many people would refuse to buy after learning of a prior non-natural death. The matter can therefore qualify under Article 88 as a mistake concerning “the nature of a thing” that is regarded as essential in trade. If the remaining requirements are met, the buyer may revoke the expression of intent; if the property also constitutes a defect, the buyer may seek rescission under the warranty rules.

References and Notes

[1] 蔡晶瑩, 物之瑕疵擔保責任與侵權行為損害賠償責任在凶宅問題之適用──臺灣臺北地方法院一○四年度訴字第二四六四號民事判決與臺灣臺北地方法院一○四年度重訴字第三二○號民事判決 [Applying Warranty Against Defects and Tort Damages to Stigmatized Property], 月旦法學雜誌, no. 271, pp. 39–49, December 2017.

[2] See Supreme Court Civil Precedent No. 1173 (Tai-Shang, 1984).

[3] Taiwan Taipei District Court Civil Judgment No. 2464 (Su, 2015).

[4] Ministry of the Interior, Mandatory and Prohibitory Provisions of Standard Form Contracts for Existing-Home Sales (Appendix 1: Building Condition Confirmation Form), amendment announced December 19, 2025; effective April 1, 2026.

[5] Taiwan Taichung District Court Civil Judgment No. 881 (Su, 2015).

[6] Taiwan Changhua District Court Civil Judgment No. 512 (Su, 2009); Taiwan Changhua District Court Civil Judgment No. 119 (Chung-Su, 2007).

[7] Taiwan New Taipei District Court Civil Judgment No. 1785 (Su, 2017).

[8] Taiwan Kaohsiung District Court Civil Judgment No. 271 (Su, 2010).

[9] Taiwan Taipei District Court Civil Judgment No. 218 (Su, 2010).

[10] Taiwan Changhua District Court Civil Judgment No. 4 (Chung-Su, 2009).

[11] Taiwan Taipei District Court Civil Judgment No. 2417 (Su, 2007); Taiwan Taitung District Court Civil Judgment No. 129 (Chung-Su, 2009).

[12] Taiwan High Court Civil Judgment No. 611 (Chung-Shang, 2009): the contractual term “non-natural death incident” should not turn primarily on the cause of death, but on whether the incident is sufficient to affect residents psychologically or impair the property’s transaction value; if so, it falls within the term.

[13] Taiwan High Court Civil Judgment No. 87 (Shang, 2012).

[14] Taiwan High Court Civil Judgment No. 401 (Shang-Yi, 2001), apparently adopting the affirmative view.

[15] 許政賢, 凶宅、物之瑕疵與法律適用 [Stigmatized Property, Defects in Quality, and the Application of Law], 月旦法學教室, no. 138, pp. 12–14, April 2014.

[16] 向明恩, 物之瑕疵擔保責任之再探—以凶宅案為例──評臺灣臺北地方法院九十九年度訴字第二一八號民事判決 [Revisiting Warranty Against Defects Through a Stigmatized-Property Case], 月旦裁判時報, no. 12, pp. 93–105, December 2011.

[17] 劉春堂, 民法債編各論（上） [Specific Provisions of the Law of Obligations, Vol. I], 3rd ed., September 2008, p. 34.

[18] See PWW/D. Schmidt, § 434, margin no. 8.

[19] The discussion of German comparative law is adapted from 吳從周, 凶宅、物之瑕疵與侵權行為──以兩種法院判決案型之探討為中心 [Stigmatized Property, Defects in Quality, and Tort: A Study of Two Types of Court Cases], 月旦裁判時報, no. 12, pp. 106–113, December 2011.

[20] Bamberger/Roth, BGB, 2003, § 434, margin no. 72.

[21] 蔡晶瑩, 凶宅交易之法律問題－－台高院101上易183判決 [Legal Issues in Stigmatized-Property Transactions: Taiwan High Court Judgment No. 183 (Shang-Yi, 2012)], 台灣法學雜誌, no. 222, pp. 167–170, April 2013.

[22] 邱琦, 凶宅與純粹經濟上損失 [Stigmatized Property and Pure Economic Loss], 月旦裁判時報, no. 7, pp. 20–28, February 2011.

[23] Taiwan High Court Civil Judgment No. 401 (Shang-Yi, 2001).

[24] Supreme Court Civil Precedent No. 1173 (Tai-Shang, 1984).

[25] Taiwan High Court Civil Judgment No. 40 (Shang, 2007).

[26] Supreme Court Civil Precedent No. 2907 (Tai-Shang, 1998).

[27] See also 吳從周, 凶宅與物之瑕疵擔保 [Stigmatized Property and Warranty Against Defects], 月旦法學教室, no. 99, pp. 14–15, January 2011.

[28] Resolution (1) of the Supreme Court’s Seventh Civil Divisions Conference of 1988.

[29] Taiwan Taipei District Court Civil Judgment No. 1100 (Su, 2009).

[30] Taiwan Hsinchu District Court Civil Judgment No. 154 (Chung-Su, 2009).

[31] 黃立, 民法債編總論 [General Principles of the Law of Obligations], rev. 3rd ed., 2006, p. 54.

[32] Taiwan High Court Civil Judgment No. 40 (Shang, 2007).