Stigmatized Properties – To Disclose or Not to Disclose?

I am often asked by real estate agents what do I have an obligation to disclose… murder, suicide, death…?

If the property has been the location of a murder, suicide, sexual assault or death these events are considered stigmas. Depending on the facts of each case and your individual purchaser it may or may not impact the purchase price or the purchaser’s willingness to even purchase the property.

Whether or not agents have an obligation to disclose information on stigmatized properties is unclear in Ontario. Ontario has no laws that require disclosure if a house is stigmatized. The law in Canada for purchasing homes is generally accepted as “caveat emptor” let the buyer beware. Exceptions are hiding material defects or making misrepresentations.

The seller is under no obligation to disclose any information about murders, suicides or anything negative that might have happened in the house. Realtors, however, are governed by the laws, guidelines and code of ethics imposed upon them.

Real Estate Agents in Ontario are governed by the rules and regulations imposed by the Real Estate Council of Ontario. RECO requires agents to disclose any material facts that affect the market value of the property. The Code of Ethics defines a “material fact” with respect to the acquisition and disposition of an interest in real estate, as a fact that would affect a reasonable person’s decision to acquire or dispose of the interest.

Most professionals that are writing in this area are advising agents to disclose matters that they themselves would want disclosed if they were purchasing the property as well as facts that you as the agent know this purchaser is sensitive too. For instance that the house was the scene of a sexual assault might not matter to the average purchaser but it would if the purchaser him or herself were sexual assaulted.

You only have one reputation think about this when you are interpreting your obligation against the facts of the properties you list.

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If you have any questions about this article, I invite you to contact me at shari@elliottlawyers.com.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.