Home Stigmas: Dare To Buy?

Stigma definition

Properties with a stigma are frequently a source of confusion for both sellers and purchasers. There are grey areas in the categorization of stigmatized property. “A property that a buyer or the general public thinks is less desirable because they think or believe that there are fewer people who want it, which lowers its value” is the commonly used definition of stigmatized property. This intangible could cause an emotional or psychological reaction and has nothing to do with a property’s condition or features.

Examples of a property stigma

Property stigmas might include things like drug or crime-related incidents (such as a grow op or gang clubhouse), suicide and fatalities in homes, violent or gory deaths, a reputation as a haunted property, or even things like residing close to hydro wires, cell towers, or a cemetery.

Does a Seller need to disclose a property stigma?

While latent defects that impact a property and are known to the seller must be disclosed, Ontario law does not require a seller or their sales agent to inform a buyer of the presence of a stigma. A listing or seller’s agent should talk with the seller about stigma when acting as their representative. The agent should encourage the seller to obtain legal counsel regarding their rights and obligations if the property carries any negative connotations.

What about a buyer? Does an agent need to tell them about any stigmas?

When an agent represents a buyer concerned that a particular stigma may be attached to a property, we advise that the buyer undertake their own research and that the sales agent conducts an internet search and asks appropriate questions of the seller or seller’s agent.

Everyone has a different idea of a stigma.

What bothers one person might not bother another. It might be challenging to determine a stigma’s exact meaning. If a senior died naturally rather than violently, how would it be perceived? Would the amount of time matter if a suicide happened twenty years ago? Would the buyer consider a youngster drowning in the pool to be a stigma? Regardless of when a death happened, realtors acting as a buyer’s agent are required to disclose any sudden or unnatural fatalities that took place on the property. Realtors are required to let their buyer clients know if there is a stigma that is known to lower a property’s value.

What property stigma might discourage you from making an offer on a property?