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A home buyer’s nightmare – property inspections failing to find fault

February 15th, 2019

A buyer is awarded only $500.00 for a building inspection report that missed extensive termite damage.

Building and pest inspection conditions are incredibly common in property contracts these days.  When purchasing a house or unit, it is always recommended that you engage a qualified inspector to look over the property for problems.  Building and pest inspection conditions generally allow a buyer to terminate the contract if significant problems are discovered with the buildings or improvements.

But what happens when major issues are not picked up in the building and pest inspection?

A recent decision of the Victorian Civil and Administrative Tribunal (“VCAT”) highlights the importance of reading the ‘fine print’ in building and pest inspection reports if you are purchasing a property.

Garrett v Elim House Pty Ltd [2018] VCAT 1862

The Garretts purchased a 100 year old timber house in 2014, for $172,000.00.  As part of the conveyancing process they engaged Elim House Pty Ltd (“Elim”) to conduct a pre-purchase inspection of the property.

After receiving the report, they decided to go ahead with the purchase.  Shortly after the sale was finalised, the Garretts discovered that there were significant structural issues with the house, including extensive termite damage.  Following the discovery of these issues, it was suggested by their builder that the house was beyond repair and should just be demolished and they should start fresh with the building.

The Garretts commenced proceedings in VCAT against Elim, claiming (among other things) that:

  1. the representations on Elim’s website, which they relied on when selecting Elim to inspect the property, were misleading and deceptive; and
  2. the inspector failed to inspect the property with due care and skill as required by the Australian Consumer Law.

Elim’s website marketed their services as thorough and technologically advanced as well as gave the impression that hidden problems would be found.  However, the report that was produced by Elim limited the scope of the inspection to a visual inspection only.  A visual inspection is standard for pre-purchase building inspections completed as part of the conveyancing process.

The report also specifically excluded some areas of the property from inspection because they could not be accessed.  This included the sub-floor where the majority of the damage was later found.  The property was tenanted at the time of the inspection and furniture obstructed some of the view of the property, particularly areas of the internal perimeter wall.  Termite damage was also later found to have been present in these areas.

Elim had noted in its report that it was ‘reasonable’ to discern that there was termite activity in some parts of the property that were not able to be inspected.  Elim also had advised the Garretts of the problems with the floors of the property, advising them that parts of the floor were ‘soft underfoot’ and would need attention in any renovation work.

Decision

VCAT found that:

  1. some of the representations made on Elim’s website were misleading, including the representation that Elim’s inspections were especially thorough and utilised high-level technology; and
  2. Elim conducted the inspection of the property with due care and skill, as the reason the termites were not identified was because of the stated restrictions to the inspection noted in the report and the structural issues were appropriately identified.

The tribunal ordered that the Garretts be refunded the $500.00 they paid Elim for the property inspection because of the misleading representations on Elim’s website.

However, the Garretts were not successful in their claim of $344,528.00 to cover the cost to them of demolishing the house and building a new home on the land.

What does this mean for buyers?

This decision highlights the importance of reviewing a pre-purchase inspection report thoroughly and, properly considering the limitations contained in the report.  It is very common for areas of a property to be excluded from building and pest inspection reports due to inaccessibility.  It is also important for purchasers to realise that a visual inspection (which is the type of inspection that is done as part of the building and pest inspection conditions in Queensland conveyancing contracts) may not identify all issues with the property.

Some problems, such as termite damage can only be identified through an invasive inspection.  This type of inspection is unlikely to be allowed by a seller as it may, by its nature, cause damage to the property.

Prospective buyers should carefully consider the contents of a pre-purchase inspection report and the weight of any recommendations made by the inspector, along with factors such as the age and relative condition of the house.  A great way to get more information is to attend the inspection with the building inspector or speak to them following the inspection to ask them questions.

If there are items in the report that you do not understand the nature of or the consequences attaching to, seek advice.  As learnt from this decision, building and pest inspection reports are not infallible and the limitations contained in these reports reduce the scope and liability of an inspector.

An experienced lawyer or conveyancer can help you to limit the risks involved in purchasing a property and deal with issues that arise from a pre-purchase inspection.

Miller Harris Lawyers would be happy to assist you with the purchase of your next property, please feel free to contact our conveyancing team on 07 0436 9700.

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4 tips to survive Valentine’s Day after your separation

February 13th, 2019

If you have recently gone through a separation, you might be dreading the upcoming annual “celebration of love” Valentine’s Day.

If you are anything like me and you are reading this article, your mind is probably already turning to the scene from Bridget Jones’s Diary where she is in her onesie pyjamas, by herself, drinking wine and eating chocolate and screaming the lyrics to Celine Dion’s classic, “All By Myself”.  Or you might be thinking about other movies that you have seen with exaggerated scenes of couples swooning in public on Valentine’s Day that make everyone feel uncomfortable.

My advice to you is to take charge and own this Valentine’s Day and plan ahead and adopt these few simple tips so that you might find yourself looking forward to Valentine’s Day, rather than dreading it:

  1. Don’t spend the day or night alone. I can almost guarantee that there are other loved ones and significant people in your life who would love to spend this time with you.  Get in touch with them now and lock them in for a celebration of your own.
  2. Now that you know who you are going to be spending Valentine’s Day with, plan something to do, that you will look forward to. This might be as simple as going to see a movie, having a movie marathon or games night at home, going to your favourite restaurant or that new place that you have been wanting to try.
  3. Treat yourself. After separation, a lot of people forget to do things for themselves, including appreciate themselves.  Reflect on something that you can give to yourself that will make you feel good.  It might be indulging in some food that you would not always eat, or it might be buying something that you have wanted for quite some time now.  Treating yourself doesn’t have to be expensive, it just needs to be rewarding to you.
  4. Treat others. As you have made the solid decision not to spend Valentine’s Day alone, why not treat the people who you are sharing it with?  As Valentine’s Day falls on a weekday this year, it may be as simple as baking or treating your colleagues to morning tea at work, writing a small thank you and appreciation card to those people who have been there and supported you during what has probably been one of the worst emotional times in your life.  You may also decide to write Valentine’s letters and place chocolates in your children’s lunch boxes.  There are many different ideas.

At Miller Harris Lawyers we care about all of our clients.  We understand that separation is emotional, stressful and complicated.  We are passionate about getting to know you, understanding your family and priorities and assisting you to reach an agreement so you can move forward.

If you require assistance through your separation, please contact one of our Cairns family lawyers to discuss your situation.

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What happens when separated parents cannot agree upon which school their child will attend?

February 5th, 2019

After parents have separated, it is not uncommon for many issues in relation to their children to come into dispute.  These issues may have previously been agreed upon prior to separation.  One issue that we see often in family law is the choice of school which your child will attend.  When this issue comes into dispute it can cause a significant deterioration in the relationship between the parents, as well as anxiety and stress for both the parents and child.

Which school a child will attend is a decision that both parents need to make jointly, unless one parent has sole parental responsibility for the child.

With the new year fast approaching, here are some tips on steps to take to resolve your dispute about schooling prior to the commencement of the first term:

  1. Raise the issue of schooling early and well before the commencement of the school term. Communicate with the other parent about which school you would like your child to attend and the reasons why.
  2. If the other parent does not agree with the school you have proposed and they propose an alternative school, consider whether or not that school would be in the best interests of your child. At the very least you should make your own enquiries and research about the school before coming to any conclusion.
  3. If you still have not reached an agreement invite the other parent to attend family dispute resolution, also known as mediation, to further discuss the issue of schooling. You should prepare for the mediation by researching all schools that have been suggested or which your child could potentially attend and the reasons why you propose your child attends or does not attend those schools

If an agreement can’t be reached at mediation, you will be issued with what is known as a section 60I certificate which will enable you to commence court proceedings to have a court decide which school your child will attend.  This should be a last resort.  Prior to commencing proceedings, you should obtain expert legal advice from an experienced family lawyer about what considerations the court will take into account.  This may also assist you in your negotiations.

If you require assistance with your family law parenting matter, contact our team of expert Cairns family lawyers today on (07) 4036 9700 or enquiries@millerharris.com.au.

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