I once listed a house for sale in Collingwood where a suspected murder had taken place. I consulted with two lawyers about disclosure requirements and got two answers: one was to follow the instructions of my client and the second was more of a question: would want or need to know this and, then make my decision from there. I'll tell you what happened later.
In an interesting seminar that I attended earlier this year, the instructor neatly categorized property stigmas into three categories:
1. Pure Stigma where a property has been psychologically impacted by a suspected or actual event such as haunted homes or, properties where a murder, suicide or death occurred
2. Physical Stigma where a physical problem has affected the property such as UFFI, mold, asbestos, lead-based paint or oil tanks and,
3. Neighbourhood stigmas when the house is located in an area known for a high crime rate or in a neighbourhood where a suspected or known criminal resides.
REALTORS® have a duty to discover and disclose facts about a property that could affect a purchaser's decision to buy a property. Our Standards of Practice lay-out our obligation to discover facts and to the avoid error, misrepresentation or concealment of those facts. We can also not exaggerate or advise on matters outside the scope of our real estate license or, break rules of privacy and confidentiality. It's a tricky area, especially in Ontario where rules of disclosure of stigmatized properties are not clearly spelled out in any legislation.
The question comes down to, what is a fact? If a house contained lead-based paint and it was removed, it is a fact and there is no question it should be disclosed. But is a haunted house a fact?
My own policy is to always disclose all known stigmas and to let the potential buyers decide if it matters to them or not. For Sellers, I doubt they'd like to endure the pain and expense of a lawsuit where a judge can decide if it matters or not. For buyers, it is important to ask the questions and, to deal with a local REALTOR® who knows about local issues, stigmas and their effect on property values. By discovering and factually disclosing pertinent stigmas, I sleep well at night knowing the right thing has been done. My reputation relies on it and so do my clients.
About the house I mentioned. We did disclose the stigma and the house sold. Sadly, there were two suicides and a fire in the house in later years. Maybe the house was cursed. Maybe not. No matter what, I have always been thankful that the buyers were fully informed.