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 a Seller Legally Required to Tell a Buyer That a House Is Haunted?

While It Is Unlikely That a Lawsuit About Whether a House Is Haunted Would Succeed In Court, It Is Always Best That a Seller Provides Full Disclosure to a Buyer and Then Refrain From Stating Anything That May Stigmatize a 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.  The buyer, concerned that rumours of the haunted status may cause a stigma with resulting harm in the form of reduced property values and the claim sought compensation for failing to disclosure the haunted status during the sales negotiations.

The Law

On the issue of proper disclosure within realty transactions, the law in Canada appears clear that the seller has a duty to disclose to the buyer any latent defects in the property that may pose a danger or make the house uninhabitable.  This rule was established by the Ontario Court of Appeal in the case of McGrath v. MacLean et al., 1979 CanLII 1691.

In regards to failing to disclose that a house is haunted, in the 1784773 Ontario Inc. case, it was determined that whereas the haunted house statements were made jokingly and whereas the buyer was unable to provide proof that the house was haunted, the case was dismissed.  Accordingly, whether would find a seller liable if evidence of paranormal activity was available remains unknown.  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

The chances of getting sued for spreading a rumour that a house is haunted is slim, a former owner of a house should avoid spreading rumours that may adversely affect the value of the property. A seller limits the risk of legal trouble by providing proper disclosure during the selling process and thereafter keeping quiet.