Drugs, Murder and Nudists

What Must be Disclosed During a Real Estate Sale in Ontario?

By Merovitz Potechin on Wednesday August 28, 2019.

When purchasing a home, most buyers want the confidence that the home they are buying is in good shape and that the neighbourhood they are moving into lives up to their expectations. With the help of real estate agents, a real estate lawyer, and a home inspector, most purchasers can obtain a large amount of useful information regarding the property in question. However, what about issues that only the seller knows about and that may not be apparent to the buyer during the process of purchasing? In this post, we will be looking at some of the unorthodox scenarios that may pop up during a real estate transaction, and whether these must be disclosed by the seller during the deal.

Does murder need to be disclosed?

It may come as a surprise to learn that there is no legal requirement in Ontario for sellers to disclose that a murder or death took place in the home that they are selling. While the Ontario Real Estate Association states that realtors have an ethical obligation to disclose this information if they know about it, it is not a legal requirement.

What about an illegal or unorthodox business?

What if the home you are buying was previously used to sell illegal drugs? Like a previous murder in the home, previous drug dealing from the home falls under the category of a stigmatized property. This means that the property has non-physical characteristics that may carry a stigma to some buyers, but do not actually impact the ability of the home to be inhabited. As such, it is not required that sellers disclose this type of activity when they are selling the home.

What if the property is next to a nude beach?

In a British Columbia case, a purchasing couple refused to close on a deal because they found out from a neighbour, after their offer was accepted but before closing, that a neighbouring property was used as a nude beach. Both the lower court judge and the Court of Appeal found that “the existence of a nude beach did not amount to a latent defect in the property.” Additionally, both judges agreed that since the nudity was occurring outside of the property boundaries, and because nudity may or may not be offensive to every buyer, it could not be considered a defect in the home.

Registered sex offenders in the neighbourhood

A final issue to consider is the presence of registered sex offenders in Ontario neighbourhoods. If a seller knows of one in the neighbourhood, must they disclose that to potential buyers? The Ontario Court of Justice heard a case on this issue in 2011 where the buyers had young children and sued the sellers and their real estate agents for failure to disclose their knowledge of a registered sex offender right across the street.

In considering the issue, the judge looked at case law in Canada where so-called hidden defects (electrical, plumbing, leaks, radioactive soil) rendered the home unsafe for habitation. Was the presence of a registered sex offender across the street considered a dangerous hidden defect of the home?

While the court decided that the case could proceed to trial to explore these issues, the matter was ultimately settled outside of court and so there is no official decision to reference.

What can you do to protect yourself during a real estate purchase?

As sellers are not legally required to disclose many of the issues discussed above, it is important that buyers protect themselves as best as they can. This means hiring an experienced home inspector, working with a reputable real estate agent, and using a trusted real estate lawyer to handle the deal.

Additionally, it is always an option to talk to neighbours in order to ask questions about the home and the neighbourhood in general. There is nothing preventing neighbours from discussing what they know about the home and its history.

If you are concerned about the history of a property you are purchasing in Ontario and have questions relating to legal disclosure about certain issues, contact the Real Estate Lawyers at Merovitz Potechin LLP.