Buyers beware – know what you are buying

Buyers must carry out a pre-purchase inspection of a property and not rely on the seller having the property in perfect condition ready for sale.

The latin maxim “caveat emptor” or “buyer beware” still remains an essential buyers obligation today as ever. It is up to the buyer to discover through pre-purchase inspections, the current condition of the property. The most common ones are:

  • Pest Inspections to check for past or present termite activity;
  • Building Inspections for major structural defects;
  • Test that all appliances included in the sale are in good working order like the dishwasher, stove, automated garage door and remote, air conditioning and remotes, electric gates and remotes, intercom system;
  • Pool inspection to know the pool filter and pool equipment are in running order and to see that the protective pool fencing complies with the current legislation.

The buyer can carry out these inspections themselves or pay to have professionals do the inspections and provide a comprehensive report.

When is the best time to do these inspections? It depends on the way the property is marketed. If the property is being sold by auction, then before the auction date. If the buyer has a cooling off period, then before the end of the cooling off period.

The purchaser then will still be able to negotiate with the seller on the price or simply decide not to proceed with the purchase and to look for another property.

Remember it’s buyer beware.

Presumption of death

For legal purposes in NSW death is defined as being:
(a) irreversible cessation of all functions of a persons brain; or
(b) irreversible cessation of circulation of blood in the persons body.

However, this definition only applies where there is a body. In many cases, people go missing and are never seen again. This could occur in rock fishing, sailing, hiking and mountain climbing, natural disasters and the like.

A person wishing to prove an entitlement founded upon a person having survived another person must, at common law, prove that fact. Where the Supreme Court is satisfied by direct evidence or on presumption of death, that a person is dead, the Court shall have jurisdiction to grant probate of the deceased’s persons will or administration of the person’s estate, notwithstanding that it may subsequently appear that the person was living at the date of the grant.

Where a person is not heard from for a period of 7 years by those persons who would be expected to have communication with that person, then a Court may presume that person dead. This period may be less depending on the circumstances of the disappearance.

Cases based on the presumption of death must be distinguished from cases where the Court is able to infer death in the absence of a body from the circumstances of disappearance, such as an aircraft disappearing over water.

Where two or more persons have died under circumstances rendering it uncertain which are then survived, the death shall, for all purposes affecting the title to any property be presumed to have taken place in order of seniority, and the younger be deemed to have survived the elder.

If you require assistance in this complex area of law, then a Best Practice Lawyer can assist you.

Buyers pre settlement final inspections

Over the years I have experienced a number of very unfortunate events that have happened prior to the day of settlement. In one case vandals broke into a home the night before settlement, had a wild party and as they left, set fire to it.

In another instance a water main further up the road behind the property burst putting ankle deep water through the home just the day before settlement. Or how about this!! A vendor’s removal truck ran over the front wall and gates upon leaving the property and took them out.

Buyers need to make sure the property is in the same condition (fair wear and tear excepted) as it was as the date of unconditional exchange of contracts. All inclusions also need to be checked to see they are in working order, e.g automatic garage door, air conditioner, pool filter etc.

More disappointing discoveries on the final inspection would be to find some of the keys to the doors or window locks are not available. The seller hasn’t removed old building materials from under the house (the seller should remove all of their possessions), or a window has been broken.

These are very annoying matters that may or may not be resolved to the buyers satisfaction.

It is crucial that a buyer make immediate contact with their solicitor or conveyancer to report any problems with their final inspection as settlement will occur otherwise, and that problem could become the buyer’s problem.

P.S. A good piece of advice for all buyers is at the time of negotiating the contract price, is to make sure that they are aware of what is staying with the property and what is being taken by the seller. For example, are the matching curtains in the main bedroom with the bedspread included in the sale, or the ride on mower, or the 108cm television bolted onto the wall in the loungeroom included??

Positive signs in the property market

There are positive signs that the housing market may be emerging from the depressed to flat state it has existed in over the past few years. The Daily Telegraph announced recently that Mortgage demand highest in three years.

With the RBA lowering interest rates to historically low levels and the Australian dollar dropping against the Greenback, signs that the housing industry is in the early stages of recovery will be welcomed. Weekend auction clearance rates remain high with purchasers actively pursuing available properties. As the economy claws it’s way back, interest rate increases may be back on the agenda.

If you are in the market for a new property, here are some tips to ensure you are ready to strike when the right property comes along:

  1. DO get finance approval from your lending institution before you start negotiating on a property or bid at an auction
  2. DO make sure that you ensure you have sufficient finance to cover additional items required to purchase a property such as stamp duty, legal’s, cost of reports moving costs and so on.
  3. DO your Pest, Building and Strata Inspection reports.
  4. DO make sure your solicitor is available at short notice to discuss any urgent matters especially if it is sold at an auction.
  5. DO get your solicitor to review any contract for any premises you are considering buying BEFORE you attend the auction or BEFORE you sign it (if not sold at auction) or BEFORE cooling off expires (at the very least!).
  6. DO NOT attend any Auction without a full loan approval.
  7. DO NOT bid above your maximum available funds if attending an Auction.
  8. DO NOT rely on word of mouth warranties on a property, from the Agent or the Vendor, make sure you undertake the necessary investigations and inspections.
  9. DO NOT buy on impulse, make sure you do your research and know the property and the surrounding area you are looking at buying BEFORE you start negotiations.