Dealing with Stigmatized Properties: A Guide

From the Marr Residence in Saskatoon (originally a field hospital during the Northwest Resistance, rumoured to have two resident ghosts) to the Custom House in Hamilton, Ontario (legend has it that the “Dark Lady” has been haunting the home for over a century), Canada has its share of houses rumoured to be haunted. 

But what would happen if one of those properties ever hit MLS?

A property seeming “off” can be stigmatized and strongly impact how buyers view it

“As a Realtor, I’ve come across clients who swear they’ve felt something (being) off in a property,” says Toly Vasilyev, Realtor with The Residential Group Realty in Vancouver. “Sometimes they feel uncomfortable for reasons they can’t really explain, and I think that’s fascinating. It can really affect how they see the home, even if there’s no concrete reason for it.”

He acknowledges that while these make for interesting stories, properties with a haunted history might also carry a stigma with them.

“Stigmatized properties, like those with a haunted history or a tragedy attached to them, can be a tough sell,” he acknowledges. “There’s definitely a niche of buyers who are intrigued by them and might even seek out those types of homes, but for the majority, it can really limit your pool of interested buyers.”

Vasilyev notes these properties might take longer to sell, and may even drop in price as well. “That stigma sticks in people’s minds, even if they don’t believe in the paranormal,” he adds.

How Ontario and B.C. treat disclosure of stigmatized properties

Gastown, one of Vancouver’s oldest neighbourhoods, is popular among tourists for its many ghost sightings over the years. Likewise, in Toronto, the Distillery District is another popular tourist destination for those interested in the paranormal.

Ray Doaii, founder and principal lawyer at Lexeon Law, now based in Vancouver, lived and worked in Toronto for years before moving to the West Coast. 

“In Ontario and B.C., disclosure requirements for stigmatized properties are essentially the same. They only differ in their legal frameworks and ethical expectations.”

According to Doaii, both provinces lack specific legal mandates requiring the disclosure of stigmatization, such as a property’s history involving crime or death. 

No disclosure statement questions around stigmatization leave it up to purchasers to inquire

“There’s always a legal and ethical obligation for sellers to disclose material facts that could affect a buyer’s decision,” he adds. “Although a Property Disclosure Statement is used for most transactions, there aren’t specific questions that deal with stigmatizations, which leaves it to each purchaser to specifically inquire about issues that matter to them.”

But what would you do as a Realtor if you found out that a home was reportedly haunted only after your client saw and fell in love with it?

How to break the news to clients post-showing

“First, I’d be upfront with the client and let them know what I found out,” says Vasilyev. “Transparency is key in situations like this. I’d explain that while it might not bother them, it could affect the property’s resale value or how potential future buyers see it.” 

His advice to other Realtors would be to approach the situation with sensitivity and professionalism. “Don’t downplay it, but also don’t make it more than it is. Give your client all the information so they can make the best decision for themselves.”

Whether or not you believe in the supernatural, the question that may matter most to Realtors and their clients would arguably be: Do I want to live in this house? 

“I wouldn’t be too concerned with ‘ghosts’ or ‘haunted houses’ unless the home is very old and looks spooky,” Doaii laughs. “But all jokes aside, my concern would be (about) the events that may have taken place in the home or neighbourhood and the personal habits or activities of the previous owners that may affect my use and enjoyment of the property.”

Vasilyev admits that it would depend on the circumstances. “If it’s just rumours or a past event that doesn’t have any bearing on the current state of the property, I’d probably be okay with it. But if the history really bothered me, or if I had trouble sleeping there because of it, I might think twice.”

At the end of the day, the desirability of “haunted” houses, just like any unique particularity or quirk of a property on the market, is at the discretion of a buyer or seller. 

“Ultimately, you want to feel comfortable in your own home,” says Vasilyev. It only makes sense that any opposing feeling to that might be a dealbreaker for some people.