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    Drugs, Murder and Nudists – What Must be Disclosed During a Real Estate Sale in Ontario?

    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 real estate lawyer Michael Brown of Merovitz Potechin LLP.

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Posted By: Michael Brown of Merovitz Potechin LLP

    Associate

    A graduate of the University of Ottawa, Faculty of Law, Michael was admitted to the Ontario Bar in 2010. Michael’s practice focuses primarily on representing and providing advice to clients on real estate development, purchase, financing and sale transactions. He also assists clients with business law matters such as lease review and drafting, planning and development proposals.

    In 2003, Michael was elected as one of Eastern Ontario’s youngest municipal councilors for the Township of Elizabethtown-Kitley. As a councilor, Michael reviewed, debated and voted on by-laws, budgets, proclamations, resolutions, and staff and committee recommendations. Michael continues to serve on various municipal boards and committees for the City of Ottawa. Michael brings to the firm a rare depth of experience arising from his unique background in municipal politics and environmental affairs. These, in addition to Michael’s other aptitudes, have proven invaluable to his clients. His in-depth understanding of such matters provides clarity and direction to clients in the fog of bureaucratic restrictions, typical in any real estate transaction.

    When Michael is not in the office, he enjoys seeing the latest popcorn action movie, travelling around the Ottawa Valley area on thrifting, local farmer’s market and antiquing excursions and visiting his extended family in Brockville.

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