Selling Haunted Houses

Question: When selling a house in Ontario, does the seller have to disclose that the home is haunted?

Answer: In Ontario, a seller typically only has to disclose known latent defects that materially affect the property or make it unfit for the intended use, not neighbourhood rumours; claims about a house being “haunted” can create litigation risk if a seller makes statements during negotiations, especially where the buyer alleges the seller failed to disclose material issues affecting value, but outcomes depend heavily on the facts and evidence (for example, McGrath v. MacLean, 1979 CanLII 1691, and 1784773 Ontario Inc. v. K-W Labour Association, 2013 ONSC 5401).   A practical risk-reduction approach is to avoid stigmatizing comments, provide full and accurate disclosure of relevant, provable issues, and get paralegal guidance on what to put in writing for the buyer, so your transaction stays grounded in Ontario realty disclosure expectations; Vagans Legal can help you assess what must be disclosed before closing, call (416) 473-8472.

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Is a Seller Legally Required to Tell a Buyer That a 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.

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

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.