Monday 22 December 2014

Buyer Beware !

One family got a very unpleasant surprise when they bought a house and had it demolished - and let a contract to build a sparkling new home on the site.  An excavator was brought in to dig a hole for a swimming pool and the driver stopped work when his machine struck a solid object.  Fearful that they might disturb a water main, sewer or some sort of service channel they called in the local council.

Council records disclosed no evidence of underground services and the operator was instructed to dig deeper - and uncovered a vast deposit of asbestos sheeting.  It seems that this house had been renovated years previously and all the asbestos siding and roof material had been buried in the backyard rather than disposed of legally.   Immediately the council issued a stop work order and demanded that not only the asbestos be removed, but also all the surrounding soil to remove contamination.

This work will need to be performed by a registered asbestos removal firm whose workers will wear protective clothing and have an independent air supply.  The recovered material will be wet down, bagged and sent to an approved disposal site.  It is not possible to calculate a firm price for this work until the extent is known, but the estimator has indicated that it will be at least sixty thousand dollars.

This has opened an interesting legal can of worms.   Who is responsible - and who will have to foot the bill for the renovation costs ?   The present and past site owners have run to their solicitors and if this develops into a long court action, the legal fees may even exceed the cost of building that new home on the site.

This is something that would be unlikely to cross the mind of any person considering a demolition to clear the way for a new home, but it should ring warning bells for those buying any pre-owned home. Appearances can be deceptive.   There may have been illegal extensions and it is not unusual to find dodgy plumbing and wiring that has been done by unlicensed tradesmen.   Often, this only comes to light when intended renovations bring the home to the attention of council inspectors - and such anomalies will be ordered to be corrected.

In Tasmania, when a house is offered for sale it is required that the new owner is presented with a disclosure statement detailing any work that has been carried out on the building, and should that prove deficient the onus falls back on the seller.   That seems to be a very reasonable form of protection, and it should be given favourable consideration by all the other states.

Buying a home is usually the biggest transaction a person makes in their lifetime and rising costs are seeing the term of the loan being extended beyond twenty-five years.   For the lowly paid, home ownership is a fast receding dream.  It is quite possible that some time in the future it may become a task that consumes the incomes of several generations to finally lift the mortgage and gain ownership.

The average home seeker must choose between two buying options, either by private contract with a seller or bidding at an auction.   Some lending institutions demand extensive pre-sale property searches before approving a loan and these may include a pest inspection and clearance from various government agencies.  These costs are wasted if the bidder is unsuccessful at an auction - or the buyer is "gazumped " at the point of exchanging contracts.   It has often been suggested that having these inspections carried out would be better required of the seller to avoid multiple costs borne by a range of unsuccessful applicants.

There has been little change in the rules that apply to property sales in recent years - and yet the price of property has increased exponentially.   As that buried asbestos has shown, it is very much an area of "buyer beware ", but a few simple law changes could iron out many of the difficulties.

It's time the property exchange laws in this country were constant in all states !

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