Selling a Haunted House

A plaintiff appeared in a court case in front of Justice Sloan’s benches. The plaintiff purchased a commercial property in Kitchener from the defendant in September 2010. On December 28, 2010 a local newspaper article appeared about the subject property headlined “and it’s haunted”. After this article surfaced, plaintiff wanted to opt out of the purchase. However, there is almost no case law on the stigmatization of property in Canada and whether or not a vendor is obligated to disclose it.

Justice Sloan questioned how the plaintiff would provide evidence as to the existence of a ghost as the court looked at two previous cases.

The first case, “Knight vs. Dionne Case”, was a 2006 small claims court in Quebec. The court in this case decided that, although the son of the vendor had committed suicide ten years earlier, that fact did not have to be disclosed to the purchaser.

The second case, “Gulielmi vs. Russo”, was an appeal from a small claims court in 2010. In this case, Justice Swinton ruled “the vendor is not liable for damages for a latent defect of which he has knowledge unless it renders the premises unfit for habitation or dangerous.”

After reviewing the previous case rulings presented by defendant’s attorney, Justice Sloan dismissed the case. The plaintiff, not being satisfied with the ruling, appealed the case in Appeals Court and the decision was upheld.

If you are buying a property south of the border, most U. S. states require sellers to disclose what they know about the condition of the property and list any potential physical defects.  Some states have elevated this requirement further for sellers to disclose “emotional defects” that could impact and stigmatize a property. This includes traumatic events like murders, suicides and reported paranormal activity. The extent of disclosure on a standard form varies with the jurisdiction.

An infamous New York court case, “Stambovsky vs. Auckley”, is often cited as a test to the disclosure law pertaining to a haunted house. Helen Auckley owned a Victorian home in Nyack, NY who claimed to have seen ghosts several times. Mrs. Auckley was interviewed by several publications including local newspapers and Readers Digest, describing details of her encounter with the ghosts. She also featured her home on a haunted house feature walking tour of Nyack! She listed her house for sale and received an offer with an advance of $32,500. When talking to a neighbor in Nyack, Mr. Stambovsky learned that he was purchasing “the haunted house”, which quickly led to the demand of his down payment back. Mrs. Auckley denied any wrongdoing and refused; the court verdict went in Mrs. Auckleys favor.

Do you intend on buying a property and need the assistance of a lawyer to guide you through the process? If you have a legal question or want to contact a lawyer regarding a property or real estate issue, please call SBMB Law at 905 883 9242 or visit our website www.sbmblaw.com.