Nobody said buying a house was easy. It’s likely to be the largest financial commitment you will ever make, so your decisions shouldn’t be made lightly. Unfortunately, the Consumer Guarantees Act does not cover property, and once the offer goes unconditional it’s extremely difficult to back out – even if you discover costly problems after the sale. The vendor and the real estate agent have obligations to the purchaser, but a sale should never be finalised without thorough due diligence and the help of a good lawyer.
Venders obligations
When putting a house on the market, the vendor is legally obliged to complete a listing agreement which discloses whether the property has any known defects including weathertightness or unconsented works. If the vendor withholds any known defects, they may be held liable for misleading or deceptive conduct. Although proving this through a private sale could be difficult.
Real estate obligations
When a real estate agent is involved with a sale, they are legally obliged under the Real Estate Agents Act, 2008 to disclose any known issues about the property to those interested in the property. If the issues were known to the agent and undisclosed, they are liable for substantial fines for misleading a buyer.
For additional buyer protection, the real estate agent must also disclose if that type of house could have defects based on their previous experience with similar properties. For example, if a structure, design and age of a property is prone to leaking, the agent must pass on this information to potential buyers. Failure to disclose this information is in breach of their Code of Conduct.
Protecting yourself
The real estate agent will be acting under professional conduct and client care, but proving that they were aware of these defects can be difficult. The best protection is careful inspection, due diligence and a good lawyer. Always carry out a LIM report and building inspection on a property before you make the offer unconditional, and never sign any documents without the assistance of your lawyer. Your lawyer can look over the Sale and Purchase Agreement to flag any potential concerns, and set you up with the questions you should be asking.
Once all the conditions have been satisfied in the Sale and Purchase Agreement, you may be entitled to one last inspection before the settlement. This is to ensure the property and agreed chattels are as you agreed in the signed document.
If you choose to buy privately, it is crucial that you get an independent valuation of the house along with a thorough building inspection and LIM report. If you believe that the real estate agent or vendor withheld information that clouded your decision in purchasing a property, contact your lawyer.
Talk to one of our MBC property lawyers today for professional friendly advice.