Selling Haunted Houses Involves Concerns for Lawsuits Alleging Failure of Disclosure

Question: Does a Seller Need to Disclose if a House Is Haunted in Canada?

Answer: When selling a house, Canadian law requires the disclosure of any latent defects that could render the property uninhabitable, but does not explicitly address supernatural "defects" like hauntings. In the ruling of McGrath v. MacLean et al., 1979 CanLII 1691, the duty is on material defects. Although a humorous comment on a house being haunted was dismissed in 1784773 Ontario Inc. v K-W Labour Association et al., 2013 ONSC 5401, it's wise to maintain open communication about property conditions to minimize potential legal disputes. For attentive assistance with real estate transactions, connect with a dedicated legal professional at Success.Legal.

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.

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

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.  In another legal dispute regarding a haunted house, the case of Manitoba Free Press v. Nagy, [1907] S.C.R. 340, was reviewed by the Supreme Court of Canada following allegations of that a newspaper for published an article containing suggestions that a vacant house was haunted.

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.