We've seen it often enough in horror films – the nice
but unwitting family who buy a house that turns out to be haunted
by ghosts, ghouls or gremlins. But what happens in real life if
something terrible has happened in the house you buy and nobody
told you? Blood and gore might be wiped from the walls and floor,
but would you have bought the home if you knew vicious murders had
been committed there?
It happened in Sydney when a family bought a pleasant looking
North Ryde home unaware that three years earlier it was the site of
one of the State's most horrific murders where a young man
murdered his sister, mother and father.
The couple who'd put a deposit on the house were horrified
when they discovered the history of the house. They said their
Buddhist faith would not allow them to live in a house where a
murder had taken place.
The agent who'd kept them in the dark as the sale went
through ended up being fined $2000. The publicity about the case
resulted in the government tightening laws to stop real estate
agents telling fibs or hiding such things from prospective
Section 52 of the Property, Stock and Business Agents Act
2002 makes it illegal for an agent to make any statement,
representation or promise to a prospective buyer which is false,
misleading or deceptive. Simply staying silent on a "material
fact" about the property is no excuse. The agent has to reveal
anything about a property that might influence the decision of a
But there's no clear definition of what constitutes a
"material fact", certainly no mention of poltergeists or
ghosts. Still, agents would be wise to reveal everything as they
might later be taken to court by a haunted buyer. But agents have
an escape clause – they can't be guilty if they
didn't know about the problem.
So buyers are best to remember the long standing common law
principle caveat emptor or "buyer beware". The
agent doesn't have to tell you about the bikie gang living down
the road, the drug den next door or the mad neighbour.
The law requires buyers be told of any problems in titles,
easements and encumbrances. But it is largely up to the buyer to
check for structural defects or whether that granny flat out the
back fits council regulations. This is where it's wise to get
legal help. After all it's probably the biggest purchase of
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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What you thought were pre-contractual negotiations could be a binding contract even where no formal contract was signed.
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