What does "buyer beware" mean and why is it important when purchasing a property?
A key legal aspect of buying a property is the "buyer beware" principle. Here's what all purchasers need to know.
The vendor is under no obligation to sell you a perfect property. Things can be broken, missing, leaking, stained, scratched, mouldy, contaminated and rusted. If there is illegal building work, or an unregistered swimming pool, or contaminated soil in the backyard: the vendor doesn't have to do anything - the property is sold in its current condition. In other words, the caveat emptoror or buyer beware principle applies: the property is sold "as is".
It's up to the buyer to thoroughly inspect the property, before they sign any contract, to ensure they know exactly what they are buying, so they can factor it into the price they are prepared to pay, and they are fully aware of anything they needs to be fixed or replaced. Common sense is irrelevant. Don't assume anything, or take anything on face value.
It doesn't matter what the advertising says, or what you can see in the online photos, or if the photos have been photoshopped/edited, or what the agent says or promises. Just because there is an air-conditioning unit there doesn't mean it has to be working. And if the agent says the vendor will fix something: that's not legally binding - unless it's written into the contract as a special condition, with a financial penalty included if the vendor doesn't comply.
Be wary of special conditions that real estate agents write in which are not checked by the purchaser's lawyer before the purchaser signs the contract. Conditions like "all electrical items to be in good working order" is not legally enforceable, and therefore not worth the paper it's written on. It must include a strict timeline for compliance (usually "within one week prior to the settlement date", so it can be checked at the final inspection, before settlement occurs) and include a financial penalty for non-compliance, which enables the purchaser to withhold some funds back on settlement day.
This should also be considered if there is a large amount of rubbish and loose items on the property, which the purchaser believes may not be removed before settlement day. The vendor doesn't have to remove rubbish and loose items - unless there is a special condition requiring them to do so, with a financial penalty included for non-compliance.
An independent professional building and pest inspection (ideally before signing anything) will ensure a purchaser is fully informed about the property, and can factor everything into the price they are prepared to pay. Indeed, a professional inspection can save a purchaser from buying a lemon!
"Fair wear and tear" between the day the contract is signed and settlement day is permitted under the contract. So if a few light globes burn out, or the lawn is a bit higher, or there are some cobwebs and dust, then the vendor doesn't have to do anything. But ten year statutory builders' warranties, for brand new builds, still apply.
Note: the above is general information and should not be considered as legal advice.
Have you seen our earlier 'sister' blog post? Top three tips when inspecting a property.
Photo via Freepik