Disclosure of a Death in the House

Fundamental Difference

Question:

Do you have to disclose a death?

What if it was a suicide?

What if it was a murder?

Answer:

Sometimes you do and sometimes you don’t. It depends who you are!

Vendor

The Vendor is under an obligation to disclose material, latent defects which are known provided that the defect 1) renders the building structurally unsound or 2) renders the property unfit for human habitation.  Most of the time, a death will not meet the threshold. But, if there were toxic fumes and a death resulted from such fumes, then the Vendor would be obliged to disclose this fact. This would apply to any death; murder or suicide would not be relevant.

Listing Agent

The Listing Agent is under a duty to investigate and determine material facts. They must be reported to their own client or customer.

So far, there would be no obligation to advertise this fact or provide the information to others.

However, there has been a trend towards increased disclosure. This is based upon the public duties of agents. One day, there will likely be a ground-breaking case which says precisely that.

Buyer’s Agent

The Buyer’s Agent is under a duty to investigate and determine material facts. They must be reported to their own client or customer. In this case, they are supposed to find out. That means asking questions and conducting searches on the internet. These matters are usually discoverable.

The failure to discover such information, provided it is reasonably available would constitute negligence.

Stigma and Fundamental Difference

At the present time, there is no obligation to disclose a stigma. But, that stigma could be quite important. Certainly, if it amounted to a “fundamental difference” between what was “bargained for” and what was “obtained”, then such disclosure would be required.

There were two notorious murders in Toronto where the bodies were placed on display in the indoor swimming pool area. The property had been on the market for $7 million. It didn’t sell. Everyone knew about the murders and the family decided to demolish the building and just sell it as a lot. This sale was completed for $2 million or $5 million less than previously sought. This stigma had a price tag of $5 million. I would say that amounted to a fundamental difference within the meaning of the Fraser-Reid case. Disclosure would be required. Caveat emptor would not apply.

However, there are no cases on point, that I am aware of, at this time.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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