With about 11 years in the real estate business now, we can tell you that this doesn’t come up often, but it does ‘just’ enough to justify writing an article on the topic.

In January 2012, we had a client who wanted to submit an offer on a Bay St. condo (it was this building). When we were putting the offer together and researching the building, we learned that there had been a fatal stabbing in the parking garage about 15 years ago.

Of course, we told my client right away, and not only did she go ahead with the purchase, she did so completely unfazed. Despite that, many of her family members were shocked and lobbied against her making the purchase! We found the polarized reactions to be interesting, especially considering how safe Bay Street is.

We think Hollywood may be partially responsible for this… The friendly seller states that for legal reasons, they must disclose a recent murder or suicide to the buyer. The buyer is undaunted and buys the home anyway, and thus begins your average horror movie.

The real estate terminology for such a home is “psychologically impacted” — which includes homes where murders or suicides have taken place and even homes ‘reputed’ to be haunted. Of course, it’s impossible to prove a house is actually haunted — and equally impossible to prove it’s not — whether or not you believe in ghosts.

Disclosure and the law

In Canada, the laws surrounding this issue can be called “muddy” at best. Material facts must be disclosed about a home and its history, but whether hauntings or murders are “material facts” is up for debate.

The most famous case involving haunted houses and real estate law occurred in New York in 1991. The seller experienced strange happenings in her home, later writing about it in Reader’s Digest. She sold the home to a man who later learned about the purported haunting, and he sued her for misrepresentation. Whether or not the home was actually haunted didn’t matter because the seller had publicly said it was haunted, making it haunted in the eyes of the law. This classified the haunting as a defect the buyer would not know about and could not be found during a home inspection, meaning the seller misrepresented the home.

Would you buy a property if a murder had occurred in it?

Buyers may have legal recourse if they decide they no longer want a home they have committed to buy upon discovering a murder has taken place there. Specifics, such as a murder still being unsolved, can also make the buyer fear for their safety and give them even more of a case.

If something tragic has happened in a home, but poses no threat to the safety of potential buyers, it is essentially a non-issue in the eyes of the Canadian real estate world.

It is also important to note that the real estate broker representing the seller cannot tell the buyers what the seller has neglected to tell them in the first place. However, it is really in the sellers’ best interest to inform the buyer about any issues in advance, to avoid legal and financial headaches down the road.

We hope you found this article to be informative! Have any questions about latent defects? Feel free to contact us at SelectCondos or on our sister site, Strata.ca.

– SelectCondos Team