Selling Haunted Houses

Question: Is the seller of a house in Ontario required to disclose that it is haunted, and who can help me understand my disclosure obligations before I list or buy?

Answer: If you are buying or selling a home in Ontario, Reznik Legal Services can help you understand whether you need to disclose rumours or reports that a property is haunted, including how courts may treat such statements as potential disclosure or misrepresentation issues when they affect property value or the premises’ fitness for the intended use; while there are few cases on “haunted” homes, decisions like 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401 and the broader duty to disclose latent, potentially dangerous defects discussed in McGrath v. MacLean et al, 1979 CanLII 1691 can influence outcomes, so it’s smart to avoid spreading rumours and to make careful, truthful disclosures through the transaction process by contacting a Paralegal at (416) 222-9906.  

Is the Seller of a House Required to Tell the Buyer That the House Is Haunted?

Although It Is Unlikely That a Seller Would Be Sued Subsequently Spreading Rumours That a House Was Haunted a Seller Can Best Avoid Hassles By Providing Full Disclosure to Buyer and Refraining Making Comments That May Stigmatize the Property.

Understanding the Law Regarding Disclosure Obligations When Selling a House Perceived As Haunted

In the case of 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401, a seller was subsequently sued by the buyer when the seller spread rumours that the house was haunted and that such was a detail the seller failed to previously disclose to the buyer.  Subsequently, the buyer brought at a lawsuit and alleged that the haunted house rumour caused reduced realty value due to the stigma arising from such a rumour as well as for the failure of the seller to disclose the haunted status during the sales negotiations with the buyer.

The Law

As for proper disclosure of defects or other concerns during real estate negotiations, a seller is obligated to inform the buyer of any latent defects that may be dangerous or otherwise make the premises unfit for the intended use. This law was established within McGrath v. MacLean et al., 1979 CanLII 1691, and subsequently followed by many cases.

As for the concern involving failure to disclose that a house is haunted, the court in the 1784773 Ontario Inc. case determined that as the statements regarding the haunted status were made jokingly and the Plaintiff was without actual evidence to prove that the house was actually haunted, the case was dismissed.  Of course, it is interesting to wonder what the decision of the court would be if some evidence of paranormal activity was available.  Another interesting case involving a haunted house, was the Manitoba Free Press v. Nagy, [1907] S.C.R. 340, decision of the Supreme Court of Canada which involved allegations of negligence against a newspaper for publishing an article suggesting that a vacant house was haunted and thereby causing a reduction in the property value of the house.

Summary Comment

Although the likelihood of being sued for spreading rumours that a house is haunted is unlikely, sellers, among others, are best to avoid the risk of a legal hassle by providing full disclosure when selling a property. Subsequently, avoiding the spread of rumours about the property is wise.