Is a Haunted Property a Latent Defect?
The Facts of the Case
In September of 2010 the plaintiff purchased a commercial property in Kitchener from the defendant. On December 28, 2010 an article appeared in the local Kitchener newspaper. Mr. Kramer, a director of the defendant, was quoted as saying the following about the subject property, to the newspaper reporter:
“and it’s haunted”, “I have heard this from a couple of people – up on the third floor, there is an office up there and they said some days you see somebody moving around inside of there and there is nobody there” & “we used to make jokes that Jimmy Hoffa was in the basement … It’s a labyrinth in there”.
It should be noted that there is almost no case law on the stigmatization of property in Canada and whether or not a vendor is obligated to disclose it.
The plaintiff put forward no evidence that anyone had died in the building whether from natural causes or some criminal act. Further, the plaintiff’s testimpny was that he has never seen a ghost, did not believe there was a ghost and that all conversations about the property being haunted were a joke and were not serious.
The Court looked at two previous. The first was a 2006 Small Claims Court case from the province of Québec, Knight v Dionne where the Court decided that where the son of the vendor had taken his own life 10 years earlier in a personal residence, that fact did not have to be disclosed to the purchaser.
The second decision was Guglielmi v Russo, which was an appeal from the Small Claims Court in 2010. Justice Swinton quotes
“… A latent defect of quality going to fitness for habitation and which is either unknown to the vendor or such as does not to make him chargeable with concealment or reckless disregard of its truth or falsity will not support any claim of redress by the purchaser.”
Justice Swinton goes on to state:
“In any event the vendor is not liable for damages for a latent defect of which he has knowledge unless it renders the premises unfit for habitation or dangerous.”
In 2013, after hearing this evidence, Justice Sloan dismissed the case that this “haunted” commercial property had a latent defect.
The plaintiff was not satisfied with this decision, and appealed Justice Sloan’s decision to the Court of Appeal. Not surprisingly, the Court of Appeal dismissed the plaintiff’s appeal.
For more information about patent and latent defects , and what must be disclosed to potential homebuyers, Click Here.