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Friday Jun 05, 2015

Who's liable for property defects after transfer?

It sometimes happens that after taking transfer and moving into a property, the buyer finds something wrong with it - and then blames the agent for not spotting or knowing about this defect or for not revealing it to him.

Potential changes to various applicable legislations are being tabled which may aid or complicate these matters further, says Wayne Albutt of Rawsons.

It is possible, he says, that it will become mandatory to have a home checked and passed by a qualified building inspector - and the cost of this will probably have to be borne by the buyer.

At present, says Albutt, certain compliance certificates are, or may be, required from registered inspectors regarding electrical, electric fences, water, wood infestation and gas.

Some of these are provincially applicable, some mandatory and others specifically required prior to a property’s ownership being transferred.

None of the aforementioned is typically understood by the general public and it is often incorrectly believed that when an electrical certificate of compliance, as an example, is issued it then means that everything regarding to the property’s electrics is 100% in order.

The reality is that the certificate of compliance only certifies that the property complies with the safety standards as specified in the ‘Electrical Installation Regulations 1992’ and will not necessarily mean that the oven, stove, lights and plug points actually work. Similar can be said about the ‘plumbing certificate’.

"The reason for this is quite simple," says Albutt. "The registered certifiers are not there to check every possible feature of the home. Their task is to ensure that the home complies with the regulations, the aim of which is simply to ensure that the home is safe and meets the requirements of the applicable legislation. If, therefore, a fault is found later it will be up to the buyer to rectify it at his own cost."

Many buyers, says Albutt, have not understood this and feel aggrieved and entitled to demand that the seller pays for the full cost of any remedial work.

The problem facing the buyer is aggravated by the fact that seldom do two inspectors agree on a list of defects and some, in the hope of being paid to put matters right, will find faults which did not in fact disqualify the home from compliance.

If, therefore, it is later made mandatory for a builder inspector to approve a house, it is quite possible that he too will miss a defect here and there, especially considering all the aspects of the property that will need to be checked: from foundational stability, to compliance of plans, to roof defects, to boundary pegs, dampness and mould - some of which are more subjective.

All the same, says Albutt, the buyer must be on his toes when entering into a Deed of Sale and in order to get some peace of mind should seriously consider getting a competent inspector to check the home. Alternatively he should make his offer conditional on such an inspector giving the home his approval.

"Despite the Consumer Protection Act, which thus far has been very seldom referred to," says Albutt, "the principles of the voetstoots still applies. This means that if after living some time in the home, or in the case of the agent inspecting it, and the owner or agent was not aware of the defect they cannot be held liable. If it can be proven that they did know of it but did not disclose this, then they could be held liable but that is usually a very hard thing to prove."

Rawson Property Group Press Release


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