Scarcity of law exists for stigmatized properties
In Ontario, sellers and real estate agents are under no legislative obligation to disclose information about murders, suicides or other negative events that may have transpired on a property they have listed, Barrie real estate lawyer Shari Elliott writes in Lawyers Weekly. Read Lawyers Weekly
“A home inspection for a property sale has become de rigueur. But not even the most astute building engineer can detect a stigma that might come with a house: be it murder, suicide, natural death or ancient burial plot,” the article, co-written by Hayley Valleau, says.
“Recent headlines in the Toronto area, about a couple suing after they learned their ‘dream home’ had been the scene of a double murder or that of a woman who complained of failure to disclose that a baby had drowned on her property, may give pause to real estate agents on the extent of their disclosure obligations,” it continues.
There is a scarcity of law and regulation governing properties that may be deemed to be stigmatized within Ontario, the article says, noting in the United States, roughly half of the states have a requirement, and its generally limited to the event having occurred within the past three years.
“The Real Estate Council of Ontario (RECO) requires agents to disclose any material facts that may affect the market value of the property. The code of ethics defines a ‘material fact’ as something that would affect a reasonable person’s decision to acquire or dispose of the interest in a property. But there is no definition for ‘stigmatized properties’ meaning agents are on their own to decide how they interpret the disclosure requirements.”