Ask Joe: Do sellers have to disclose a home’s dark past?

This is the second in a series of three blog posts that come to us through RECO.  Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real-estate professionals in Ontario.

What does a seller’s rep have to disclose about the home to me as a buyer?

A psychological stigma is a non-physical attribute of a property that may trigger a negative emotional response in the potential buyer. In Ontario, there is no requirement to disclose the existence of stigmas to buyers.

There are a number of reasons that a property might be considered stigmatized. Was it the site of a murder or suicide? Did a notorious criminal once reside in the home? A former meth lab or marijuana grow-op that has since been remediated and is safe to live in can also be considered stigmatized.

While events that could be considered stigmatizing occurred in or near the property for sale, they do not necessarily have any bearing on the function or appearance of it.

But some may shudder at the thought of their future home having a criminal past. Some may even be upset if their home has a reputation for being haunted.

While sellers aren’t required to disclose potential psychological stigmas to buyers, you can take measures to try to avoid purchasing a property that you would consider stigmatized. The first step is to have an open and frank conversation with your real estate representative. While they should have a written list of your “wants,” they should also be armed with a list of what you absolutely do not want. Explicitly tell your agent what you want to avoid in your future home. And if that includes paranormal entities, say that, too — no matter how silly it might feel.

Your representative can then review property listings with informed scrutiny. If they don’t see any mention of issues that reflect what you would consider to be stigmas, then they must go one step further and make a formal inquiry to the listing representative.

Sellers are within their rights to sell a property for as much as they can. That said, a seller may not want a stigma known to prospective buyers as it could affect the purchase price or reduce the number of prospective buyers. In this case, they may instruct their representative to not disclose a stigma. The seller’s representative can’t lie if asked a direct question, but they can decline to answer the question and suggest that the buyer’s representative conduct their own research.

If this happens to you, there are a couple ways you can research a property you’re interested in buying. First, try an Internet search of the address and street name. Second, speak with some of the neighbours about the house, the street and the neighbourhood.

Remember, as a buyer, you are ultimately responsible for determining whether a property will suit your needs. Conducting a bit of research and having a thorough conversation with your representative about your criteria are key first steps in finding your dream home.

Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real-estate professionals in Ontario. Email questions to askjoe@reco.on.ca . Find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at youtube.com/RECOhelps .