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 buyers.
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 prospective buyer.
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 your life.
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