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.

Does the Seller of a House Need to Disclose That the House Is Haunted to the Buyer?

While It Is Unlikely That a Lawsuit About Whether a House Is Haunted Would Succeed In Court, It Is Always Best That a Seller Provides Full Disclosure to a Buyer and Then Refrain From Stating Anything That May Stigmatize a Property.

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

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

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.