Selling Haunted Houses

Question: Is a seller legally required to tell a buyer in Ontario that a house is haunted?

Answer: In Ontario, sellers generally must disclose latent defects that make a property dangerous or unfit to live in, but they’re not usually legally required to disclose a “haunted” stigma unless it amounts to a misrepresentation or is tied to a material issue that affects value or habitability, and disputes over paranormal claims have been difficult to prove in court.  For practical risk reduction in real estate transactions, DK Legal Practice provides Paralegal support across Ontario for disclosure, misrepresentation, and deal breakdown concerns, so call (416) 906-6663 to get clear, fast guidance before you sign or respond.

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.

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.  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.