The answer to this question can be found in the first two paragraphs of this hilarious short story. Readers enter the story, and they are immediately informed that Mr. Otis has bought the Canterville mansion. The previous owner was Lord Canterville, and we are told that he felt it was the honorable thing to do to tell Mr. Otis the reason for selling the house in the first place. It turns out, according to Lord Canterville, that the house is haunted. Several members of the family bear witness to the haunting and can attest to the presence of a ghost.

Indeed, Lord Canterville himself, who was a man of the most punctilious honour, had felt it his duty to mention the fact to Mr. Otis when they came to discuss terms.

"We have not cared to live in the place ourselves," said Lord Canterville, "since my grandaunt, the Dowager Duchess of Bolton, was frightened into a fit, from which she never really recovered, by two skeleton hands being placed on her shoulders as she was dressing for dinner, and I feel bound to tell you, Mr. Otis, that the ghost has been seen by several living members of my family, as well as by the rector of the parish, the Rev. Augustus Dampier, who is a Fellow of King's College, Cambridge."

Mr. Otis flatly denies the possibility of such a thing, and he claims that if ghosts did exist, the Americans would have one in a museum already. The Otis family is eventually forced to admit that the haunting is a real thing, but the Otis family actually ends up antagonizing the ghost to no end.

In Chapter One of "The Canterville Ghost," Lord Canterville reveals why he could no longer stay at Canterville Chase. For some time, he explains, many members of the Canterville family have lived in a state of perpetual fear because of the resident ghost. His wife, Lady Canterville, for example, could rarely sleep at night because of the "mysterious noises" which emanated from the library and the corridor. Many members of the family caught glimpses of the ghost and even the local rector, Reverend Augustus Dampier, claims to have seen him.

Even worse than these fleeting glimpses, Lord Canterville's grandaunt, the Dowager Duchess of Bolton, was "frightened into a fit" after the ghost appeared to her as she was dressing for dinner. As a result, many of the family's servants refused to stay at the house, prompting Lord Canterville to move out and to put Canterville Chase on the market.