Selling Haunted Houses

Question:In Ontario, does a house seller have to tell the buyer if the home is rumoured to be haunted?

Answer:In Ontario, a seller generally must disclose latent defects that make the property dangerous or unfit for the buyer’s intended use, but “haunted” rumours are less clear and depend on facts like whether the seller made statements as fact versus joking, and whether the buyer can prove actual impact on value or misrepresentation rather than just belief;  cases such as 1784773 Ontario Inc. v. K-W Labour Association, 2013 ONSC 5401, show the outcome can turn on the evidence and context of how the rumour was communicated;  for practical guidance on what to disclose during negotiations in Ontario, Reznik Legal Services can help you reduce risk and document the right information, call (416) 222-9906 to book a consultation.

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Does the Seller of a House Need to Disclose That the House Is Haunted to the Buyer?

A Lawsuit Regarding a Haunted House Maybe Unlikely; However, a Seller Can Avoid Legal Troubles By Providing Full Disclosure to a Buyer and Refraining From Statements That Risk Stigmatizing a Property.

Note: Please contact Reznik Legal Services by phone at: (416) 222-9906 to discuss any specific questions that you may have.

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

The case of 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401, suggests that a seller who jokes about selling a haunted house may be subsequently sued by the buyer for failure to disclose the haunted status.  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

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.