Misrepresentation? Help..

[matt85]

Hi, I recently just bought an investment property. When I was buying, the seller put it on the contract that a the additions to the house (I.e patio, pergola, sheds..) were all approved by the shire. But then it turned out they weren't just before the initial settlement date. But I was trying to be nice and did not charge them penalty for delay in settlement. When we were negotiating for another date for settlement, the seller were reluctant to get the approval for the sheds as they said they knew they would not get approved for sure. They then asked me if I could exclude that from the contract. At that time, I was under a lot of pressure and I didn't really care too much about the sheds as they are pretty old and ugly looking. So I agreed to only get approval for the patio and pergola.

Now, 4 days after the settlement, the shire called me and told me the sheds are not approved and they must be taken down. BUT, he also told me that the big shed was built with Asbestos! And it must be professionally removed by a licensed removalist.. If I knew it had asbestos, I would never agree to settle the house without the sheds. The shire said the owners knew it has asbestos right from the start but they chose not to tell me. Would that constitute a misrepresentation already? Because i thought it would be something a normal person would expect to be disclosed to them. They knew it would be taken off and they obviously knew it would cost them a lot to take it down, that's probably why they didn't want to tell me about it.

Also when I asked them if there's anything asbestos at the back including the fence. The owners said no. But tonight I reckon part of the fence and a couple of the sheets laying at the bsck have asbestos too.

I am just wondering if anyone had experienced this situation before. Would I be able to take any action on them?

 

[wylie]

Did you use a solicitor? If so, or even if not, I would be asking a solicitor whether the fact that you asked a specific question about asbestos and were told a lie, whether you have any come back.

Do you have anything in writing. Was it a verbal question? Anyone witness the answer?

 

[shuggy]

I'd deduct the cost of having them removed at settlement.
Edit: just noticed settlement's over so you're probably stuck with them unless you have anything in writing like wylie mentioned.. verbals aren't worth the paper written on. This is a good example of ensuring DD is done prior. Good luck with the outcome.

 

[INVSTOR]

i always have a 'subject to being satisfied with building inspection" clause and negotatiate after I get report. Good to know for next purchase.

 

[matt85]

No, it was only a verbal question. At that time, there were me, the sellers and the real estate agent..but I highly like think the real estate agent would say otherwise..

I was using a settlement agent, but she doesn't really think I would stand a chance..

Plus I did have a building inspection report done. But it mentioned nothing about the shed..

 

[depreciator]

When you were standing round discussing the shed, did you notice whether the vendor had his hands behind his back with his fingers crossed?

It going to be hard to do anything about it. Probably best to just move on and deal with what you need to sort out.

There is an ATO ruling where the removal of asbestos in a rental property can be claimed as an immediate tax deduction. You might need to rent the place out for a while first, though.

 

[depreciator]

Here's a link to the ATO decision, Matt:

http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2004720/00001

 

[Angel13]

I would have thought the building inspection report would have picked this up. Isn't that why we pay a lot of money to get building inspection reports done? To protect us from things like this happening?

 

[Zeddy]

Plus I did have a building inspection report done. But it mentioned nothing about the shed..

As an aside, can't the company who did the inspection be held responsible for their report?

I don't know how it works in these cases, but I do know that consulting structural engineers may be held accountable if they can be shown to be negligent.

 

[Propertunity]

....the fact that you asked a specific question about asbestos and were told a lie, whether you have any come back.

The OP will have a come-back but will probably need to go to court to seek specific performance. The cost of court Vs cost of fixing sheds up usually exceeds cost of doing stuff yourself and without the emotional costs.

I agree with depreciator: "It going to be hard to do anything about it. Probably best to just move on and deal with what you need to sort out."

 

[Propertunity]

I would have thought the building inspection report would have picked this up. Isn't that why we pay a lot of money to get building inspection reports done? To protect us from things like this happening?

NO. If you read lots of building reports (as I do), you'll see they specifically EXCLUDE testing for asbestos, mould etc. There are so many disclaimers in building reports, you have to wonder why you do them sometimes.

Virtually every building report I see, recommends separate reports for:
Asbestos
Mould
Alarm/Intercom/Data
Durability of exposed surfaces
Council Plan inspection
Electrical
Mechanical services
Appliances inspection
Structural (engineer)
Hydraulics inspection
Plumbing
Drainage
Air Con
Geotechnical
Swimming pool inspection

 

[Angel13]

I never knew that. Thanks Propertunity, at least now I will be much more aware in the future.

I love this forum, I learn so much from you all

Somersoft you rock!

 

[evand]

I usually don't. For exactly that reason.

The disclaimer section of B&P reports are usually larger then the report itself.

 

[Propertunity]

The disclaimer section of B&P reports are usually larger then the report itself.

They are indeed. 16 - 30+ pages of report manytimes and you have to find 4 lines of pest report:
Were active subterranean termites (live specimens) found? No.
Was visible evidence of subterranean termite workings or damage found? No.
Was visible evidence of borers of seasoned timbers found? No.
Was evidence of damage caused by wood decay (rot) fungi found? No.

... and 3 lines of building report:
The incidence of Major Defects in this Residential Building as compared with similar Buildings is considered: ( ) High ( X ) Typical ( ) Low
The incidence of Minor Defects in this Residential Building as compared with similar Buildings is considered: ( ) High ( X ) Typical ( ) Low
The overall condition of this Residential Dwelling in the context of its age, type and general expectations of similar properties is: ( ) Above Average, ( X ) Average, ( ) Below Average


I think it comes down to an insurance issue.

Since the collapse of HIH & FAI insurance companies, there are a limited number of insurance companies left in the marketplace that will write a policy to cover building & pest inspectors.
Of those insurers left, they have made it a condition that reports are filled with disclaimers and biology lessons on termites and borers – and so they are.

 

[Aaron_C]

I've never had one done either because if you look at the number of properties that I do, I'd go broke long before I could buy anything.

 

[INVSTOR]

I've never had one done either because if you look at the number of properties that I do, I'd go broke long before I could buy anything.

i always get my money back by having vendor fix little things. usually about $300 worth. All the bigger stuff I keep in mind/budget to get fixed later.

 

[NBS]

Currently doing my Building Inspector Course hopefully finished in a couple of weeks.

As mentioned the disclaimer is rather large and I dare say very driven by insurance companies. The preminum rocketed after a couple decks collaspe in Qld and insurances companies looked more closely at disclaimers.

I have read a lot of reports myself and I tend to agree when its mostly a tick or cross in a box if its "high - medium or low risk". this tells the purchaser bugger all to be honest.

Also its not up to the inspector to say if the structure is lllegal or not, this is part of the purchaser DD and this should be obtained from council to see if its an approved structure or addition.

As for asbestos I'm quite sure I will not be doing any tests for possible asbestos unless the client has asked me and paid the extra to have the test carried out. Costs about $160.00 the last time I had some tested.

It sounds more like the owner is not being totally honest rather than aiming at the inspector.

Brian

 

[INVSTOR]

I have a building inspector in Perth who would sit down with you for half an hour after report and explain it all. Different experience in Brisbane though. I rang to query report and the builders reply was, "I'm not sure, I've done a few today, I can't remember which was your property....oh, I think so?". It is kind of handy though when buying interstate if you haven't seen the property.

 

[NBS]

I have a building inspector in Perth who would sit down with you for half an hour after report and explain it all. Different experience in Brisbane though. I rang to query report and the builders reply was, "I'm not sure, I've done a few today, I can't remember which was your property....oh, I think so?". It is kind of handy though when buying interstate if you haven't seen the property.

Well thats just poor service as far as I am concerned. Does not matter how many you did you still SHOULD have all the info down in relation to the property so you can at least discuss your findings with your client if asked.

Brian

 

[Terryw]

Matt

I don't like your chances. You knew the sheds were not approved for starters. You also will probably find the contract specifies you take the property at the condition it is when you enter the contract. Unless you have any special conditions regarding asbestos then I don't think you have any grounds.

Always best to use a lawyer for conveyancing work.