Selling Haunted Houses

Question: Is a seller of a house in Ontario required to tell a buyer that the home is haunted, and what should the seller disclose or avoid during negotiations?

Answer: In Ontario, a seller is generally expected to disclose latent defects that create danger or make a home uninhabitable, and rumours or “haunted” statements can create risk if they impact the transaction or are treated as factual; courts have considered disputes involving haunted-house comments, including 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401, where the haunted-joke context and lack of proof affected the outcome, so the safest approach is to avoid stigmatizing remarks and provide clear, accurate disclosure for material facts that could affect habitability or value.  If you are buying or selling and you want practical guidance on what must be disclosed in your realty deal in Ontario, Bulat Paralegal Service can help; call (705) 664-0334 to discuss your situation with a paralegal.

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

Although It Is Unlikely That a Seller Would Be Sued Subsequently Spreading Rumours That a House Was Haunted a Seller Can Best Avoid Hassles By Providing Full Disclosure to Buyer and Refraining Making Comments That May Stigmatize the 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.

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.