‘Outrageous’ laws landing buyers with dud properties

By Vivienne Kelly

“Fundamentally unjust” property laws, with numerous loopholes, are responsible for too many investors and home buyers purchasing “lemon” properties, according to a number of experts.

Current property laws in Queensland “fail to protect buyers”, according to Trish Mackie-Smith, who has a background in property law and runs a building inspection company.

Ms Mackie-Smith is currently petitioning the Queensland government, with the support of local MP Kate Jones, the Attorney-General Yvette D’Ath and the Queensland Law Society, to better protect buyers and switch the onus of responsibility for a property’s condition from the buyer to the seller.

“The current law is based on ‘buyer beware’, which is a fundamentally unjust law. It is astounding that is has been left untouched to wreak havoc for so long,” Ms Mackie-Smith said.

“This law causes immeasurable financial hardship to buyers who have no recourse if they buy a house that has defects. Many buyers do not even get building reports to save money, or because they think they don’t need to. Even worse for those buyers who do – these are only visual inspections. It is easy for dishonest sellers to cover up these issues so they are undetected.

“It is outrageous that the most important and most expensive purchase in our lives is not covered by consumer protection laws.”

Ms Mackie-Smith is seeking “sweeping positive changes to the entire real estate industry and conveyancing law practices in Queensland”, similar to those which were recently implemented in other markets around the world.

“Only in the ACT [in 2003] and recently in the UK have new laws replaced the ‘buyer beware’ principle, obliging the seller to disclose structural defects etc. or face criminal charges,” she said.

Ms Mackie-Smith said the current regime encourages dishonesty and unethical practices, with buyers stuck with defective properties and no legal recourse.

“Why is it that you must provide a roadworthy certificate when you sell a car, however when you sell a defective yet expensive house, no such warranties need to be provided?

“The winners in this current legal loophole are the sellers and some dishonest real estate agents, who can get away with non-disclosure. It leads to dishonesty and unscrupulous practices so that the sale gets through regardless of structural defects.”

Home buyers and investors in Queensland are purchasing “lemon” properties and are facing “a financial nightmare because of the outdated doctrine”, she added, with examples of non-disclosure including poor drainage leading to toxic mould, water leaks leading to ceiling collapse, poor workmanship leading to accidents and injuries, asbestos in the walls, and cracks that are covered up.

The proposed changes include one set of reports per property, rather than multiple reports for different potential buyers. The end buyer would then reimburse the vendor for the cost of the report – “this saves the buyer money as they don’t have to pay for a report if they do not buy”, Ms Mackie-Smith said.

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