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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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.

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

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

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.

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.