Is it Legal Not to Disclose Problematic Neighbors When Selling a House?

Question

In most places in Canada, there are certain things a home seller must disclose to potential buyers, such as known problems with the house, e.g. a leaky roof, mold, etc.
I'm in Nova Scotia, specifically.

Usually this is done via a property condition disclosure statement.

The question is, does this extend to other perils, like known criminal behavior of immediate neighbors?

Hypothetical scenario to illustrate what I'm talking about:

Let's say a there's one problematic neighbor, causes problems for all of his neighbors. He's a general nuisance, causes property damage, poisoning pets, etc. He has arrests for these things, and was told to leave the area (restraining order) for a period of time. All of this causes one of the neighbors to list his property in despair so that he can get away from the nuisance, as it's a detriment to his quality of life.

This came up in discussion my wife and I were having, as we both know someone experiencing this exact issue. We weren't sure if the person who bought the house from the fed-up seller would be entitled to some remedy if the seller didn't disclose the problems with the immediate neighbor.

Answer 1

Nova Scotia does not have mandatory disclosure laws as exist in many US states, where you may be explicitly required to reveal neighbor problems (California: item 11 on the forms). Instead a Nova Scotia seller / buyer must rely on what is explicitly included or excluded under case law. This problem would likely fall in the realm of latent defects, not a patent defect that is readily discoverable by an ordinary inspection. In that circumstance, the vendor would have a duty to disclose dangerous defects, ones that render the property useless for a buyer's purpose (as understood by the seller), or else stop-work orders and the like that fundamentally affect the value of the property.

There is a form that the Nova Scotia real estate commission uses for sellers to disclose defects, but this is optional and only represents their considered legal opinion as to the likely non-disclosures that could land them in court (some of the underlying cases are Lambert v. Gillis (1993), 122 N.S.R. (2d) 296; Chisling and Hatcher v. Frame (1990), 98 N.S.R. (2d) 417; King and Bowser v. Kesebi (1985) 68 N.S.R. (2d) 175 – see this article). The questions primarily address physical characteristics of the real estate, with some mention of pollution sites near the property, zoning and other legal matters limiting the usefulness of the property.

The fundamental legal question is whether what you describe falls in the realm of fact that a seller has a duty to disclose. Current Nova Scotia law favors the "caveat emptor" regime, with exceptions carved out to require disclosure of a limited number of most-detrimental facts.