Selling Haunted Houses Involves Concerns for Lawsuits Alleging Failure of Disclosure

Question: Does a seller have to disclose if a house is haunted?

Answer:   While there is no legal obligation regarding haunted status per se, sellers must disclose any latent defects that may affect the property’s value or safety.  The law, established in McGrath v. MacLean et al., 1979 CanLII 1691, indicates that failure to do so could lead to legal trouble.  Although the case of 1784773 Ontario Inc. v K-W Labour Association et al, 2013 ONSC 5401, was dismissed due to a lack of evidence, sellers should err on the side of caution to avoid rumors that could stigmatize the property.  Traffic Ticket Rescue can assist with navigating your legal disclosure responsibilities to ensure a smoother selling process.

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

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.

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.  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.

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

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.