A stigmatized property is one that has an unfavourable quality that may make it less attractive for reasons that are unrelated to its physical condition or features. Examples of stigma issues may include:
a suicide or death in the property
the property was the scene of a major crime
the address of the property has the wrong numerals
reports that a property is haunted
What one person finds unacceptable may not be a stigma to another.
Generally speaking, sellers are not legally required to disclose property stigma.
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+ If you are a buyer
When you’re shopping for a home, you’ll likely talk to your real estate professional about the features you’re looking for; you should also discuss the things you want to avoid.
Tell your real estate professional if you are concerned about certain stigma – for example, if it would bother you to find out a suicide has taken place in the property. If there are stigma that bother you, your real estate professional can ask a seller or the seller’s real estate representative direct questions about any existing stigma associated with a property you’re interested in.
The seller or the seller’s representative is not legally required to answer questions about stigma; however, they can’t lie. If they choose to answer your questions about stigma, they must do so honestly.
If the seller refuses to answer your questions, this may raise a red flag. In that case, you can
- proceed with the purchase without an answer to the stigma question
- do your own research:
- through the Internet. For example, try Googling the address.
- ask neighbours. Neighbours can be a great source of information. They will almost always know, for example, if a major crime has occurred at the property. If you see them outside when visiting a property, say hi.
- find another home to purchase
Your real estate professional can help you decide how to proceed.
+ If you are a seller
As a seller, it is up to you to decide if you want to disclose a possible stigma to a potential buyer. You are not legally required to do so.
As a seller you can:
- refuse to answer the buyer’s question(s)
- answer the question with a disclaimer that the buyer should not rely on the accuracy of the information and to verify the information for themselves
- answer the question without qualification
If a buyer asks you about possible stigma, and if you choose to answer, you must do so honestly. You cannot lie to potential buyers about stigma.
You may be worried that disclosing a stigma will negatively affect the value of your property. On the other hand, if you aren’t willing to answer questions about possible stigma, it may scare some buyers away.
Ultimately, it is completely your decision whether to disclose stigma. Your real estate professional cannot disclose stigma to a potential buyer without your permission.