Stigmatized Property in Alberta: Buying or Selling a Home with a History

After reading the title of this blog post, you might be wondering what on earth a “stigmatized property” is. A stigmatized property is a property that may be shunned by buyers based on something other than the physical condition, selling price, or other features of the home. While stigmatized property may sound like an odd concept, it’s actually an important factor to consider when buying or selling real estate.

What are Examples of Stigmatized Property?

Stigma may attach to a property where a

• suicide,
• death,
• murder or
• other crime has occurred on the property.

Stigma may also arise from rumours that a property is “haunted” or has some attachment to the supernatural. Additionally, certain numerals may stigmatize a property for some people, for example, a house bearing street number ‘13’, or an apartment on the 13th floor of a building.

General Rules

Whether you’re a buyer or a seller of real estate, the following is worth considering when it comes to stigmatized property. As a general rule, a seller is not required to disclose a “stigma” to potential buyers.

If, as a seller, the buyer asks you specific questions about the alleged stigma, you have three options:

• First, you can decline to comment on the stigma altogether. The obvious downside to this option is that it may appear as though you have something to hide.
• Secondly, you can answer the buyer’s question without qualification. The potential downside with this option is that it may dissuade the buyer from purchasing your property if you confirm their suspicions regarding the stigma.
• Thirdly, you can answer the question, but inform the buyer that they should not rely on the information and should verify the accuracy of the information for themselves.

Your Rights as a Seller of Stigmatized Property

If you’re the seller of a stigmatized home, your real estate agent cannot disclose the stigma without your permission. A lawyer can help you better understand your rights as the seller of a stigmatized property, however, you should also consult with your Realtor regarding market realities to determine the implications that disclosure or non-disclosure of the stigma will have on the market value of your property and on the timeline in which the property is likely to sell.

Your Rights as a Buyer of Stigmatized Property

If you’re a homebuyer, it’s important to be forthright with your Realtor from the outset and let them know about any stigmas that would potentially deter you from purchasing a property. You may have religious or cultural concerns about purchasing a home with a certain stigma attached to it. Disclosing these concerns to your Realtor from the beginning will allow your Realtor to investigate and avoid stigmatized properties early on in the home buying process.

Regardless of whether you’ve heard news, rumours, or other information about a prospective property, you’re entitled, as a potential homebuyer, to ask a seller about stigmas. The seller can decline to answer your inquiry, however, a refusal to answer by the seller is likely telling. The seller can also respond to your inquiries, however, the seller is obligated to answer your questions truthfully if they do respond.

If you suspect that there may be stigma attached to a property that you’re considering purchasing, there are two common-sense approaches.

• The first is to do your own research. Research options include internet searches, consultation of news sources, and scuttlebutt with neighbours who may have the “inside scoop” on a local property.
• The second option is to simply walk away from a potential home purchase where you suspect that there is stigma attached to the property. While this may seem like trite advice, at the end of the day there are plenty of homes on the market and it may be preferable to keep looking rather than settle on a stigmatized property and suffer buyer’s remorse down the road.

We’re Your Local Calgary Real Estate Lawyers

If you’re considering the purchase or sale of a stigmatized property, the experienced real estate lawyers at West Legal can help you better understand your legal rights and obligations in relation to your circumstances. As a friendly reminder, none of the above is legal advice, and it’s important that you consult with both a qualified Realtor and an Alberta real estate lawyer before making any decisions with respect to a stigmatized property.