Selling Haunted Houses

Question:When selling a house in Ontario, do I have to disclose that it is haunted to avoid legal trouble?

Answer:Denali Paralegal can help Ontario homeowners understand real estate disclosure duties, including when a “haunted” claim must be disclosed versus when it’s safer to avoid repeating rumours without evidence. In Ontario, sellers generally must disclose latent defects that could make the property unsafe or unfit for its intended use, and courts have looked at whether a seller’s statements were actually made as fact versus joking, plus whether the buyer had proof of a real issue (for example, 1784773 Ontario Inc. v K-W Labour Association, 2013 ONSC 5401).   Even if a lawsuit about a haunted rumour is less likely, the practical, lower-risk approach is to provide full, accurate disclosure during negotiations, avoid stigmatizing comments about the property, and have your file reviewed before the sale closes; call (877) 414-4377 for guidance from a paralegal supporting limited scope family law services in Ontario.

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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.

Note: Please contact Denali Paralegal by phone at: (877) 414-4377 to discuss any specific questions that you may have.

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.

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.