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Asymmetric information on the Stigma associated with Real Estate in Fiji

Real estate is a huge sector in any country. It plays an important role in the economic development of a society and an individual. Everyone is directly or indirectly involved in the real-estate industry.

It is often noticed that many property buyers do not go through the finer details which they should know about before buying a property. These are important information which could have an impact on their lives emotionally and financially after the purchase of the property is completed.

In this article we will discuss on the importance of asymmetric information which the property buyers should pay attention. Basically, these are the stigmas attached to a property.

Our REALB team has come across several cases during the road shows in the Western Division where this vital information was highlighted. This should be of concern to a property buyer before a decision is made whether to invest in that particular property or not.

Real-Estate agents on behalf of property owners are obliged to inform potential buyers if any stigma is associated with the property.

Six types of common stigmas are associated with the real estate properties that include criminal, debt, minimal, murder or suicide, phenomena and public. The stigmas associated with real-estate are unrelated to its physical condition or features. It can also include the murder, suicide, and death of an occupant or drug and prostitution related cases.

The importance to disclosure such information was raised by several members of the public who purchased properties in the past and then faced problem related to the

Although there is no provision in the Real Estate Agents Act 2006 on the disclosure of stigmas, but it is the moral obligation of an agent or property owner to disclose such information to the buyers.

In real-estate industry, stigmatized property is asymmetric information (failure of providing accurate information) which the agents should disclose to the potential buyers.

In Fiji, the popular phenomena where the agents need to disclose if a house is renowned for haunting, ghost sighting, drug or known for immoral activities (prostitution). It is encumbered on agents to explain in detail the history of a commercial building or residential property. Sometimes witchcraft was also practiced by the previous occupants on the premises.

There have been cases where immoral activities taking place on a property or drug dealings by the previous owner. Under such situation when the new owner moves in then he or she would face problems and even the safety of his or her family is at stake. There is a high risk and the household could be disturbed by the strangers.

If you are interested to buy or rent a property then it is recommended that you make a thorough investigation. This will give you a peace of mind and your family members will be protected from disturbance and, harassment.

  1. Always use Google to check a property or the neighborhood and study the past news and reports of that particular neighborhood. Use key words such as murder, suicide, prostitution when collecting information.

  2. In Fiji, we have a very close society and it is extremely difficult to obtain information from neighbours on any adverse features relating to neighbours properties. However, through this way one could gain detail information on that particular property.

  3. It should be mandatory to the property owner and real estate agent to disclose to the prospective buyer any stigma attached to the property.

  4. Before signing any sales and purchase agreement it is highly recommend that the buyer ask real estate agent/property owner if there is any stigma attached to the property.

Case Study

Last year REALB team carried out a sting operation where we sought information on a particular bogus agent. Officers from REALB met the bogus agent as a potential buy at the site. The bogus agent with REALB officers inspected several properties in the Central Division and finally the officers were guided to a particular house.

After inspection and a few hours later through our investigation we were informed by a reliable source that that particular house was allegedly haunted and it was vacant for some time. We were informed that several people who occupied that particular house were ended up with problems and could not live peacefully.

This case study is a real incident and we thought appropriate to bring to the attention of the potential property buyers if they wish to invest in properties.

For any feeback you can send emails to the REALB Communications Officer, Pravin Narain on

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