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There are legal and ethical nuances of purchasing a property with a potential stigma such as a history of murders, suicides, criminal activities (e.g., grow-ops}, reports of paranormal activity, association with notorious individuals, or cultural beliefs.
The reference to a “potential” stigma above was intentional, as a stigmatized property is subjective to each individual Buyer that might perceive the property negatively due to non physical factors, such as past events or associations, rather than its actual physical condition or features.
An experienced real estate lawyer will be able to navigate the Buyer through a Seller’s disclosure obligations, and the potential impact on property value.
Most Buyers are surprised to discover that in Ontario, Sellers are not legally required to disclose stigmas. The rationale for this non-disclosure is rather simple: a stigma to some is not a stigma to all, as a stigma is purely a subjective perception by each individual buyer.
Therefore, the following are some key guidance tips for Buyers:
1. Conduct due diligence and ask specific questions about potential stigmas;
2. Research property history through public records, news archives, online searches and
neighborhood inquiries;
3. Ask the right questions depending upon your personal feelings and beliefs;
4. Consider future resale challenges based on the type of stigma;
5. Engage in detailed conversations with both your realtor and lawyer to
identify any sensitivities to potential stigmas; and
6. Consider adding clauses in the offer to address known or suspected stigmas.
Sound and timely legal advice is imperative. Kormans LLP accomplishes this through our
experience and understanding of the rights of the parties, and our availability to provide such
advice to our clients and their realtors.
Summary
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