Selling Haunted Houses

Question:Is a seller legally required to tell a buyer that a house is haunted in Ontario?

Answer:In Ontario, a seller is generally required to disclose known latent defects that could make the home dangerous or uninhabitable, but there is usually no clear legal rule that a “haunted” reputation alone must be disclosed. Courts have considered claims tied to haunted-house comments, including 1784773 Ontario Inc. v K-W Labour Association, 2013 ONSC 5401, where joking statements without proof were dismissed, and the risk may be higher if there is evidence and the information is actually material.   To reduce disputes, sellers can avoid stigmatizing remarks and ensure any relevant known issues are disclosed through proper realty documentation, and buyers can ask for full disclosures before closing. If you need lawyer and paralegal help with seller or buyer disclosure duties, contact Olson Craig Legal at (226) 886-2001 in Ontario to optimize your position before the deal closes.

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Is a Seller Legally Required to Tell a Buyer That a House Is Haunted?

A Lawsuit Regarding a Haunted House Maybe Unlikely; However, a Seller Can Avoid Legal Troubles By Providing Full Disclosure to a Buyer and Refraining From Statements That Risk Stigmatizing a Property.

Note: Please contact Olson Craig Legal by phone at: (226) 886-2001 to discuss any specific questions that you may have.

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.

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.  Another interesting case involving a haunted house, was the Manitoba Free Press v. Nagy, [1907] S.C.R. 340, decision of the Supreme Court of Canada which involved allegations of negligence against a newspaper for publishing an article suggesting that a vacant house was haunted and thereby causing a reduction in the property value of the house.

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.