Real-estate transactions come with all kinds of legal obligations. Documents need to be completed, filings made, and regulations followed upon the closing of any real-estate deal. However, one of the last things anyone thinks of disclosing in any real-estate transaction is the existence of a ghost.
Yes, you read that correctly. More precisely, reported ghost sightings, or hauntings, associated with a property might qualify as something called a stigma, or a stigmatized property. These involve issues surrounding a property that have nothing to do with the physical state of the property itself.
All kinds of stigmas
Examples of real-estate stigmas include past murders or suicides on the property, the property being home to people with deadly diseases, and, yes, you guessed it: alleged ghosts or hauntings.
The common characteristic among all real-estate stigmas is that they don’t physically affect the current state of a real-estate property. However, real-estate stigmas do certainly affect the psychological state of those considering purchasing the property, which is why the issue can be controversial.
In other words, if buyers were fully aware of any stigmas surrounding a property, they might well have not bought the property in the first place. Such cases have been presented in courtrooms across North America, where buyers sue over not being told of property stigmas.
What the courts say
The courts have generally ruled that a seller has no legal obligation to disclose any property stigmatization during a real-estate purchase or sale. This generally means that caveat emptor, or buyer beware, applies.
As a result, if potential property stigmatization is of genuine concern to a real-estate buyer, then some research might be in order. Alternatively, a property owner can simply keep concealed any stigma upon subsequent resale.
Although a real-estate seller is under no legal obligation to disclose any property stigmatization, the Real Estate Council of Ontario requires all its agents to make such disclosures — in the interest of having the profession deal honestly and fairly with the public. Such requirements among real-estate agents do not exist in all jurisdictions.
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