Selling Haunted Houses

Question: Is a seller in Ontario legally required to disclose that a house is haunted before selling it?

Answer: In Ontario, Paladin LLP can help a seller or buyer understand disclosure duties for real estate, including avoiding statements that could stigmatize a property even when the “haunted” issue is hard to prove; while disclosure obligations usually focus on latent defects or concerns that make premises dangerous or unfit for intended use, courts have addressed haunted-house allegations with outcomes that can turn on the facts, including whether the claim was supported and whether rumours or disclosures were made inaccurately or without proof.   To reduce legal risk, a seller should provide complete, accurate disclosure about known material facts supported by evidence, avoid repeating rumours as if they are verified, and correct any misleading statements during negotiations, since failing to disclose relevant issues can create liability exposure.   If you are dealing with a haunted-house disclosure dispute in Ontario, contact Paladin LLP at (289) 925-1572 for a paralegal-informed next-step assessment and practical guidance on how to document what you know and respond appropriately.

Is a Seller Legally Required to Tell a Buyer That a House Is Haunted?

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

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.  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.

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.  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.