Buyer beware
A client recently contacted us with their experience with an agent marketing a 3 bedroom property for sale, where the "3rd bedroom" was an unapproved conversion of a garage into a habitable space.
Buyers should also be aware of the implications where representations about the property may prove incorrect if there is illegal building work by the vendor / predecessor, or if the agent has misled them about the property, and as a result they remain unaware of illegal building work.
Illegal building work may mean not just that the building quality and value are compromised. It may also lead to council ordering demolition of the illegal building work, or part of the property being uninsurable. It could significantly affect your enjoyment of the home, and resale value, if the house was reduced from 3 bedrooms to 2, or lost its family living room because it was built without approval and in breach of height restrictions.
You might also find that you become liable to someone who is injured due to the work such as illegal electrical wiring, plumbing or decks.
Other examples of active misrepresentations;
- filling in the cracks on outside walls, and
- covering inside cracks with wallpaper to hide faulty foundations,
and some of those that have ended up in the courts include;
- that a house is free of dry rot,
- is free of infestation or
- is not damp.
In addition to getting legal advice, surveying advice, building and pest advice, valuation advice, tax and financial advice, buyers should also consider retaining their own "buyer's agent" to represent their interests. Retaining a buyer’s agent is often overlooked yet the benefits of obtaining an agent are substantial and in particular may prevent a buyer from being the victim of misrepresentations or misleading conduct under the Australian Consumer Law.
--------------------------------------
Source: Written by Peter McNamara, Partner of Clark McNamara Lawyers, Sydney
