Guest Author Lou Pesta. Read Lou's bio here.
When marketing a home for sale, the question of whether or not to disclose that a death has occurred in the property is not an easy one to answer. Unlike many states in the USA we do not have specific “stigma disclosure” laws in the Province of Alberta. In fact, outside of the Province of Quebec I have been unable to find any court precedents respecting this issue. As a result the question has to be addressed in the context of existing “material latent defect” disclosure rules.
As everyone knows, the default obligation under the Common Law is for buyers to conduct a reasonably diligent inspection of a property being purchased. This is referred to as caveat emptor or buyer beware. Whatever defects buyers can see for themselves the seller is entitled to keep silent on.
The exception to this rule is called Material Latent Defect where the law requires active disclosure by the seller where the following three tests are met:
- The defect is latent (not visible or easily discoverable upon a reasonably prudent inspection).
- The defect is known to the seller.
- The defect creates a health risk or a structural problem.
It is my personal view that a particularly gruesome and recent suicide or murder could satisfy all three of these tests. The fact that a suicide or murder had taken place in the home would not be visible, it would be known to the seller and could create a mental health risk for an unsuspecting person living for a time in the home without being told the gruesome history. If one puts themselves in the shoes of a prospective buyer, then there is little doubt that they would wish to know and would feel aggrieved if they were not notified of this type of event.
On the other hand, I do not personally believe that a common, every day, natural death has to be actively disclosed. When people buy an older home they have to expect that someone might have died there at some point in time. If a particular buyer has an aversion to or concern over this type of event, then they should be asking appropriate questions. It should be kept in mind, of course, that a seller might not know the full history of a property unless they are the original owners.
The problem is that this creates a lot of grey area. Where does one draw the line? What if the suicide or murder occurred two decades ago? What if the death involved a lengthy illness?
It is due to the difficulty in drawing a line between disclosable and non-disclosable events that some would recommend active disclosure of all known deaths in a property. While an active disclosure policy is fine for an industry member to pursue, it needs to be remembered that it is ultimately the home owner who will make the final decision. Any disclosure instructions received from a client have to be documented in writing to avoid misunderstandings.
Clients should always be encouraged to secure independent legal advice to secure comfort respecting the action to take. In instances where an industry member feels that they are obliged to disclose that a death has occurred in the home and the seller is not prepared to authorize same, the only course available to the industry member is to either decline representing that client or terminate the relationship.
It should also be noted that the Real Estate Council of Alberta has posted some excellent information on its website including relevant bulletins on Stigmatized Properties and Material Latent Defects that I would highly recommend to individuals seeking further information on this topic.