Caveat Emptor… Buyer Beware
6 min read
When you buy property, in all circumstances, you purchase under terms that that say ‘buyer beware’, in legal terms it’s known as “caveat emptor”.
What is meant by caveat emptor or buyer beware?
Buyer beware essentially means it’s up to you as a Purchaser to make your own enquiries with regard the contract and the property, and to conduct all relevant due diligence enquiries before you decide to buy. This could include (but is not limited to, things like:
- Having a lawyer review the contract and vendors statement before you sign anything;
- Checking that the person selling the property is the person who owns it;
- Making enquiries with local council on planning or building applications nearby;
- Checking for caveats and overlays;
- Ensuring that you can actually do what you want to do with the property (ie. development, extensions and the like);
- Details of building permits over the last 7 years (or building works performed without a permit by the current owner that could put you in a pickle if permits have not been obtained);
- If there is a pool, spa (or even a pond) – is it properly fenced and registered?
- PLUS, much more.
Over recent weeks, we’ve seen a level of desperation in the property market that we really have not seen before. Driven by lack of stock on the market for buyers to purchase, those who had/have been able to inspect in-between lockdowns (and even those that have not been able to inspect in person) all seem to be desperate to get their offers in.
What does this have to do with caveat emptor?
During times of intense competition in the market, we often see buyers taking risks that they normally wouldn’t. This could be bidding at auction past a pre-approved purchase price, not getting a building inspection or buying sight unseen.
Once the contract is signed, there are a few reasons you may withdraw from the property purchase, these are generally due to conditions you or your lawyer has imposed. Such as finance not being approved by the agreed upon deadline, or a failed building and pest inspection. You may also be able to back out of the contract if there are any material facts not disclosed during the sales process, or if the agent/vendor has engaged in misleading or deceptive behaviour.
There are many reasons that don’t allow you from withdrawing from a contract. We were recently engaged by an individual who had entered a contract after reviewing it themselves, did not get a building inspection yet assumed they would have recourse because of a problematic post-purchase inspection – unfortunately they do not and are now stuck with a very expensive mistake.
There’s a lot involved in reviewing a contract and conducting due diligence. Making enquiries and engaging a conveyancer or lawyer upfront is going to be well worth your money down the track if you decide the property is not for you – in fact you could save yourself hundreds of thousands (or even millions) of dollars.
Caveat Emptor. Buyer please do Beware!
It is such an important time as a Buyer and we are here to assist and protect you as best we can in the current climate and in the ‘new normal’. We help our clients to buy and sell every day and have done so for almost 20 years and are here to assist you.