We were all horrified to learn that a serial killer in Toronto was allegedly a landscaper who disposed of human body parts in planters at properties and may have buried remains in the gardens of homes he worked at. One of the owners said they would not sell their property because they still love their home. A key issue to me is, will the sellers have to disclose this gruesome discovery should they decide to sell their home in the future? Here are five lessons to remember when it comes to property stigmas.
1. Murders or suicides will affect a home’s value.
Most appraisers will tell you that if home has had a murder or suicide in it, it will likely affect the home’s market value, whether it occurred in the past year or even up to 20 years earlier. People still disclose what occurred many years ago when selling the old Paul Bernardo home in St. Catharines, Ont., even though the home where the murders took place was demolished and a new home built. Interestingly, it is also noted that stigmas such as these do not “travel”, meaning that it should not affect the other homes on the same street.
2. Does a murder or suicide in a home need to be disclosed by a seller?
Although the law is evolving, sellers do not have to disclose whether there has been a murder or suicide on the property or adjoining property or whether a pedophile lives on the same street.
In an interesting case a few years ago in Bracebridge, Ont., buyers refused to move in when they learned that the neighbour across the street had been convicted of possessing child pornography. The buyers sued the sellers for not disclosing this. In a preliminary motion, the sellers tried to have the case dismissed because there was no precedent for this to be disclosed. Judge Alexandra Hoy decided to let the case proceed and said, the “buyers’ claim is novel. It raises policy issues regarding the protection of children and the effect this may have on the re-integration of people convicted of certain crimes into society.”
The buyers later sold the property and did not move in and the case settled, so we do not know how a judge might have ruled. In my opinion, the garden pot body-part sellers would not have to disclose this when selling their home.
3. Does a real estate agent need to disclose a murder or a suicide if they know about it?
A real estate agent needs to tell the truth if they are asked a question. They should thus discuss this issue with any seller and get explicit instructions, preferably from the seller’s lawyer, as to how they should respond to any inquiry about these subjects. Agents should remember that sellers who tell them not to disclose something that the seller knows will devalue their property should already be treated as suspicious.
4. What about a haunted house? Does this need to be disclosed?
While most people would laugh at this, there was actually a case in New York in 1990 on this point. Helen Ackley claimed that her home in the town of Nyack, N.Y., was haunted. For a decade between 1977 and 1987 she was in the news off and on, describing paranormal incidents in her house including such things as the bed being shaken each morning by a poltergeist. Her notoriety was such that Reader’s Digest paid her $3,000 for an article, Our Haunted House on the Hudson, which was published in May 1977.
In 1990, she sold the home but did not mention anything to do with the paranormal to the buyer. The buyer sued when he later found out. The judge found that since Ackley had spoken and even made money off claims her house was haunted, she should have disclosed it. This case occurred around the time of the movie Ghostbusters. One of the judges hearing the case said, “Who you gonna call” if you find out. In my opinion, this does not have to be disclosed.
5. How can a buyer protect themselves?
In the Greater Toronto Area, we have more languages spoken and more cultures and communities than anywhere in the world. No matter what the law says, these kinds of stigmas are going to affect people. As such, buyers should Google the property address they are interested in to see if any murder, suicide or other stigma was reported. Visit the neighbours and ask about the house you are interested in and consider putting a clause right in the offer whereby the seller represents and warrants that to the best of their knowledge, there has been no murder or suicide on the property. Sellers must respond truthfully to this statement and can be sued later if they lie.
Mark Weisleder is a senior partner, author and speaker at the law firm RealEstateLawyers.ca LLP. Contact him at mark@realestatelawyers.ca or toll free at 1-888-876-5529.
