By Tim Mansfield
Monday, 12 March 2012
Caveat emptor, or let the buyer beware, is based on the 12th-century premise that a purchaser can view and handle goods offered for sale in marketplaces (such as meat or fresh bread) and make their own choice as to whether to buy them or not.
This principle still holds true today, whether in buying property or a tin of baked beans in your local supermarket. And the assumption remains that the consumer has an obligation to be satisfied about the quality of the purchase.
But buying a property is not the same thing as buying bread in a marketplace in the mediaeval era, or for that matter anything else you buy in your local supermarket today. Times have changed, and the onus of responsibility for a purchase has theoretically shifted from the buyer to the seller.
In real estate transactions nowadays a seller’s duty of disclosure is limited to disclosing latent defects in title, or issues directly related to the property. An example of latent defects or issues might be with neighbours.
Sellers are currently not obliged to disclose structural damage, planning issues or nonmaterial issues. They should declare events that occurred in or on the property (known as stigmatisation), such as a murder or suicide.
Either way, declaration or not can have an effect on the marketability of a property and can impact on the selling price.
Should legislation on this issue be brought up to date? What do you think?
Tim Mansfield is founder and principal of Sydney-based buyers' agency Prime Property Buyer.