Selling Haunted Houses

Question: Does a home seller in Ontario have to disclose that the house is “haunted”?

Answer: In Ontario, sellers generally must disclose latent defects that make a property dangerous or unfit, but a “haunted” reputation is usually a stigma rather than a physical defect, so liability often turns on what was said or represented during negotiations and whether a buyer can prove measurable harm; for guidance, see 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401, and McGrath v MacLean et al., 1979 CanLII 1691.   For practical, risk-reducing advice on real estate disclosure, negotiations, and dispute prevention across Ontario, contact Benchmark Legal Offices, a Paralegals and Lawyers’ Office to Serve You, at (289) 389-8840 for a clear plan that helps you close confidently and avoid costly post-sale claims.

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

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

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

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.