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?

There Are Few Cases Involving Rumoured Haunted Houses; However, It Does Appear That the Manner In Which Rumours Are Spread May Result In Liability For Stating That a House Is Haunted and Thereby Causing a Reduced Property Value.

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

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.

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.  In another legal dispute regarding a haunted house, the case of Manitoba Free Press v. Nagy, [1907] S.C.R. 340, was reviewed by the Supreme Court of Canada following allegations of that a newspaper for published an article containing suggestions that a vacant house was haunted.

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.