Understanding the difference can make all the difference.
Here are three important lessons every buyer, seller and REALTOR® should know.
1. The Shai Gilgeous-Alexander Case Was About More Than Reputation
One of Ontario’s highest-profile real estate cases involved NBA star Shai Gilgeous-Alexander and the Burlington mansion formerly occupied by alleged “Crypto King” Aiden Pleterski.
Shortly after purchasing the home, Mr. Gilgeous-Alexander learned that people looking to recover money from Mr. Pleterski were repeatedly attending the property. The buyer alleged that this history had not been disclosed before the transaction.
The Ontario Superior Court set aside the Agreement of Purchase and Sale, finding there had been fraudulent misrepresentation. The Ontario Court of Appeal later dismissed the appeal, meaning the decision remains good law.
The important takeaway is this:
The Court didn’t simply say the home had a bad reputation. It found that the undisclosed circumstances materially affected the buyer’s use and enjoyment of the property.
That’s a very different legal issue than an ordinary “stigma.”
2. Buyers Should Never Assume They’ll Be Told Everything
Many buyers assume sellers must disclose every unpleasant fact about a property.
In Ontario, that simply isn’t the law.
If a death, a notorious former owner, criminal activity, or other non-physical circumstance would affect your decision to buy, you should raise those concerns before making your offer firm.
RECO encourages buyer representatives to have these discussions early because every buyer has different sensitivities. What matters deeply to one purchaser may not matter at all to another.
The best protection is often a well-informed question—not a lawsuit after closing.
3. Communication Prevents Litigation
Most disputes involving stigmatized properties can be avoided.
Buyers should clearly communicate any concerns with their REALTOR® and lawyer before submitting an offer.
Sellers should have an open discussion with their REALTOR® about any potential stigma associated with the property and seek legal advice whenever there is uncertainty about disclosure obligations.
REALTORS® should document these discussions carefully and obtain clear instructions from their clients.
Good communication before an offer is accepted is almost always less expensive than litigation after closing.
Practical Tips
• Buyers: If a property’s history matters to you, ask specific questions before your conditions are waived.
• Sellers: When in doubt, obtain legal advice before deciding what should—or should not—be disclosed.
• REALTORS®: Don’t assume what matters to one buyer matters to every buyer. Ask the questions early and document the answers.
A Personal Note
I had the opportunity to comment publicly on the Shai Gilgeous-Alexander case when it was making headlines because it raised one of the most interesting questions in Ontario real estate law:
When does a property’s history become a legal issue?
The answer is rarely black and white. Every case turns on its own facts, which is why obtaining legal advice before problems arise is always the safest approach.
Dig Deeper
CBC News – Canadian NBA star wins lawsuit to undo purchase of mansion where Ontario “Crypto King” lived
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Ontario Court of Appeal – Gilgeous-Alexander v. Pleterski
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