Selling Haunted Houses

Question: Can Theresa Forrest, Paralegal help me as a seller in Ontario figure out whether I must disclose that my house is haunted before closing the sale?

Answer: Yes. Theresa Forrest, Paralegal can help Ontario sellers and buyers understand real estate disclosure duties and reduce legal risk by (1) identifying what counts as a material latent defect or safety issue that must be disclosed, (2) reviewing sales communications to avoid statements that could improperly stigmatize a property, and (3) drafting or advising on a full, accurate disclosure package in line with Canadian common law and Ontario court guidance on latent defects like McGrath v. MacLean et al, 1979 CanLII 1691. If you want a quick, practical review of your situation, call (519) 902-4223 to speak with a Paralegal serving clients across Ontario.

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.  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.

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.