Selling Haunted Houses

Question: When selling a house in Ontario, does the seller have to disclose that it is haunted to the buyer?

Answer: In Ontario, a seller generally must disclose latent defects that could make the property dangerous or uninhabitable, and while a haunted-house claim is often hard to prove, it can still create negotiation and lawsuit risk if the seller says or implies things that stigmatize the home.  The safer approach for sellers is full, accurate disclosure of known material issues and to avoid stating rumours as fact, then get paralegal guidance to review the particulars before closing.  If you’re a buyer or seller dealing with disclosure concerns about a stigmatizing condition in Ontario, DK Legal Practice can help you understand your options and next steps, call (416) 906-6663.

Add this website to Google Preferred Sources

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 DK Legal Practice by phone at: (416) 906-6663 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.  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

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

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.