Is the Seller of a House Required to Tell the Buyer That the House Is Haunted?
Few Cases Address the Legal Issues 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 will be without liability if the seller is subsequently sued by the buyer for failure to disclose the haunted status.
In the 1784773 Ontario Inc. case, the litigation alleged that, following sale of a house, the seller publicly stated that the house was haunted. 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.
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. Another interesting case involving a haunted house, was the Manitoba Free Press v. Nagy,  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.