Selling Haunted Houses

Question: Do sellers need to disclose if a house is haunted?

Answer: While there may be little risk of legal action for claiming a house is haunted, sellers should prioritise full disclosure to prevent potential issues down the line. Providing transparent information during the sale can protect against reputational damage and ensure a smoother transaction.

Is the Seller of a House Required to Tell the Buyer That the House Is Haunted?

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

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

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.  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.