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.

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

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.  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

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.