Selling Haunted Houses

Question: Is a Seller Legally Required to Disclose That a House Is Haunted in Ontario?

Answer: Theresa Forrest, Paralegal can help you understand Ontario real estate disclosure duties if you are buying or selling a property that may have a haunted or paranormal reputation.  In Ontario, sellers must disclose latent defects that create danger or make a home uninhabitable, and the core duty was described in McGrath v. MacLean, 1979 CanLII 1691.  Courts have also looked at whether haunted-status claims were mere rumours or jokes, and whether the buyer can prove the allegation’s impact, including in 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401.  Because you can reduce risk by giving full, accurate disclosure and avoiding stigmatizing comments, a paralegal at Theresa Forrest, Paralegal can review your situation and transaction documents, and you can call (519) 902-4223 to get guidance.

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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

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.

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

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.