Can You Sue A Home Seller For Failure To Disclose A Stalking Risk?

Posted on: 28 August 2015

In the United States, a New Jersey family is suing the previous owners of their home for failure to disclose the house was being stalked by a mentally disturbed individual. Apparently, soon after moving into the home, the family began receiving bizarre letters from the individual that made it obvious he or she was watching the home and became more threatening as time went on. Whether or not the perpetrator meant to do harm or was playing a hoax remains to be seen, but the incident does bring up the question of whether sellers have a duty to disclose these types of things to potential buyers. Unfortunately in Ontario they don't. Here's more information about this issue.

Limited Disclosure Requirements

In Ontario, sellers are only required to disclose certain information. Specifically, sellers are only required to tell buyers about latent defects in the property that make the home uninhabitable, dangerous to live in, or unfit for the purpose the buyer wants to use it for. The law defines latent defects as flaws that are not obvious during a regular inspection of the home. This would include things like cracks in the foundation or mold in the walls. If the latent defect doesn't fit the criteria, then the homeowner is not required to tell potential buyers about it.

However, this rule only applies to the physical property. Stalkers would likely fall into the category of real estate stigma. A stigmatized property is one where an event occurred on or near the home that was so heinous or notorious, it negatively impacted the home's psychological or social value in the community. For instance, a person being murdered in the home could have a stigmatizing affect on the property's value because buyers may be reluctant to purchase a house where someone was killed. People dying in the home, suspected ghost haunting, pedophilic neighbors, drive by shootings, and similar issues are all part of this category.

Unfortunately, there is no law in Ontario that compels sellers to disclose to potential buyers that the home is a stigmatized property. So even if the homeowners had been receiving threatening letters from an unknown individual for years, they would not be required to tell you about it before selling you the house.

Is There Any Recourse for Recovering Losses?

Since Ontario's laws requires minimal disclosure of adverse issues on a property, it may be very challenging to go after a previous homeowner for damages related to their failure to disclose a stigmatizing event. However, it may be possible to recover damages if you can prove the event qualifies as a latent defect that made the home uninhabitable, dangerous, or otherwise unfit for use.

For instance, in addition to the threatening letters, the perpetrator attempted to break into the home on several occasions. An argument could be made that the stalker's presence made the home a dangerous place to live, since the perpetrator was attempting to enter the home to do the occupants harm; thus a judge may hold the seller liable for disclosing this information.

On the other hand, if all the perpetrator did was send nasty letters and there was no evidence he or she intended to physically hurt the residents, then a judge may not see that as enough of a hazard to the buyers to qualify as a dangerous condition that warranted disclosure.

However, you may have some recourse against the real estate agents that sold the home. Real estate agents are obligated to disclose all facts they are aware of that may affect the value of the property. If the real estate agent knew about the stalker (or other stigmatizing events) and didn't notify you of this information, you may be able to sue him or her for any losses you sustained as a result.

Real estate disclosure issues can be very challenging to litigate. If you feel a seller failed to disclose a material issue that affected the safety or habitability of your home, consult with an attorney for more info on how to develop a legal strategy to recover compensation for your losses.