Do you feel protected?
Do you feel protected?
When you’re buying a property, a transaction which is likely to be the most expensive purchase of your life, what protection do you have in the era of leaky homes or questionable ethics?
In real estate transactions, the principle of ‘caveat emptor’ or ‘let the buyer beware’ comes into play just as much as it does with any other purchase. This means the onus is on you to carry out your own thorough diligence.
The good news, however, is that since the advent of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 buyers have far more protection than before. The essence of these rules is that those involved in selling a property, usually the vendor and the real estate agent, have serious obligations to disclose information to the purchaser regarding the property being marketed and any known issues that may affect a purchasers opinion of its value.
What does this mean in practice? At the bare minimum, an agent must disclose known defects to a customer, whether it’s the fact there was a minor leak in the in the laundry that has now been fixed or if there have been any known weather tightness issues in a particular complex before. In some situations, agents need to go a step further, as if it appears likely to a reasonably competent agent that the property might have a hidden or underlying defect, the agent must proactively get confirmation from the vendor and expert evidence that nothing is actually defective. This often arises in homes built in a particular time period using particular materials that are commonly associated with weather-tightness issues. In these cases, an agent must proactively investigate this risk in order to fulfil their duty of care to the purchasers.
The Real Estate Agents Act was designed for licensed agents, so the obligations on a vendor in a private sale is a grey area. What this does highlight is that if you are selling your home, it’s crucial to enlist an agent to guide you through the sales process, as case law is always breaking new ground and even if your home seems indefensible, taking a risk just isn’t worth it.
On the purchaser’s side, although none of the above replaces the importance of your own investigations, at the very least it provides another level of protection from an unfortunate investment.
For more information head over to the Real Estate Agent Authority website.