Despina Priala advises on buyers’ rights whenever the features of a property have been misrepresented
Q: I bought a property in Brisbane a year ago. It was advertised and sold as a dual income, dual living property but was basically a three-bedroom, single-level house with a double garage on one end and a two-bedroom unit on top of the garage.
For the last year it has been leased out to two separate groups by two different agents. I recently received a letter from the Council saying that it does not meet town planning rules and that there can only be one lease on the whole property.
At first the builder was adamant that it was all OK and the Council was wrong. He had a legal letter drawn up and sent to the Council, but he is now saying that I will have to only have one lease at the next lease renewal date.
At the end of the day, the property is not what it was said to be. I want to know what recourse I have. I would never have been interested in it if it wasn’t what they said it was.
A: Ever heard the saying “Buyer beware”? For Queensland, it means that buyers must ultimately do their own searches and enquiries when purchasing real estate, to inform themselves of any pitfalls or adverse matters that may affect the properties.
There are two issues to deal with here: first, the representations made by the agent and/or the seller through the marketing and advertising; and second, the ‘buyer beware’ status in Queensland.
Many agents include a disclaimer in their written advertisements (eg on websites, newspapers and the like) as to the information contained in the advertisements. This does not necessarily mean that the agent is protected against any action for misleading and deceptive conduct. A court will also look at the conduct of the agent at the time. If, for example, the agent provided verbal representations to the buyer that the property was approved for dual living by the local Council, and if the buyer can prove such statements induced them to enter the contract, then there may very well be recourse against that agent.
The same can be said for the builder/owner if the same or similar representations were made by the builder/owner, and the buyer relied upon these to enter into the contract. There is an abundance of case law on this very point. Each case depends upon its own facts, the sophistication of the buyer, the nature of the transaction, the nature of the information provided, and the contents of any marketing material relied upon.
Does the buyer have any recourse against the seller? We come back to the unwritten rule of ‘buyer beware’ in Queensland. Although this exists, the courts have generally taken a narrow view of any laws that purport to exclude or limit the rights of a buyer and limit the duty of a seller to disclose matters relating to the title to the property, such as encumbrances or liability. In Queensland, with a standard contract of sale the seller expressly contracts to give a title free of encumbrances except those as disclosed. However, the standard contract does not provide express warranties for all matters concerning the property, and it is general practice for buyers to conduct their own searches after they are bound by the contract, and then rely upon rights to determine the contract if a search reveals the nondisclosure of a material defect.
The situation is different if the seller knew the property was not zoned or permitted as dual living but represented the property as dual living occupancy. In this case, the buyer may have recourse against the seller for misleading and deceptive conduct and may claim for damages as a result.
The other question I would be asking here is whether or not any searches were conducted by the buyer once bound, and, if so, whether these searches included searches of Council records where the use and zoning of the property could have been discovered. Were the correct searches ordered to confirm the dual living rights? Is there a possible claim against both the seller/builder and the agent for misrepresentation?
Without further information it is difficult to determine. But what is clear is that this particular buyer should obtain independent legal advice as to any possible recourse.
Disclaimer: The information in this article is of a general nature only and should not be relied upon as legal advice. You should seek advice for your particular circumstances before entering into any transaction.
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