January 3rd - 2011

LEGAL BEAT by Mervin Burgard: Disclose the fact that suicide took place

A question was asked about whether a builder was obligated to disclose to a buyer that an intruder broke into a house and committed suicide just before the sale closed.

A question was asked about whether a builder was obligated to disclose to a buyer that an intruder broke into a house and committed suicide just before the sale closed.

Ontario lawyer Bob Aaron’s opinion was that, under Ontario law, there was no obligation for the builder to disclose this fact. I referred Aaron to Knight v. Dionne, the Quebec decision of 2003, in which the judge decided that a suicide cannot be considered the kind of factor that is liable to affect the value of the building.

Barry Lebow, an appraiser and broker, opined that the seller likely does not have to disclose, but that if a REALTOR® is involved, he or she is required to disclose.

Merv’s Comments
I was asked a similar question by a British Columbia lawyer who was updating some B.C. materials for REALTORS® there. My legal advice is that although it may not be necessary for a builder or seller to disclose such events, the buyer may feel that he or she was deceived and initiate a lawsuit. The buyer might even refer the matter to a builder’s licensing body such as Ontario’s Tarion.

As Lebow states, if a RECO registrant is involved, it is a different situation, since your REBBA Code of Ethics requires disclosure of material facts. In my opinion, a death as described above can be considered a fact that requires disclosure since it "would affect a reasonable person’s decision to acquire or dispose of an interest in real estate."

Although builders and sellers are not bound by the Code as REALTORS® are, my simple advice is: when in doubt, disclose.

Ontario REALTORS® can read several questions and answers on this topic in OREA’s online Legal Forum.

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