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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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

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.