Vendor honesty important to home sales

Press, 13 July 1988, Page 53

Vendor honesty important to home sales

It is true that a prospective purchaser buys a property at his own risk but it should be pointed out that the vendor too has his own responsibilities. This matter cropped up not so long ago. After a residential property changed hands, the buyer moved in and found that the true boundary at the back differed from what he saw at the time of inspection. He had a slightly smaller section than what he thought he had bought. The buyer was not unduly concerned but he asked the Real Estate Institute what could have been done if the discrepancy had been big enough to worry about. Most standard sale and purchase agreements make this plain. For instance, the forms printed for the Real Estate Institute and the Auckland District Law Society contain a clause to the effect that the vendor is not obliged to point out the boundaries of a property under negotiation and that the purchaser shall admit that no further evidence of the identity of the land is required from what is implied in the description on the title deeds.

In view of this, there is probably very little a purchaser can do if he finds he has been shortchanged. The responsibility is his to ensure that he is getting all the land he should have. The fence line itself is not

always a true guide. A fence may have been moved to suit the convenience either of the owner or his neighbour, perhaps both. The previous owner may have arranged for the fence to be moved as part of an unwritten agreement to provide more space for gardening, a pastime in which the neighbour is not interested. Or perhaps one may have needed a half metre or so along the side to provide a wide enough right of way for a car and the other has been happy to oblige. If uncertainty exists in the mind of a prospective buyer that the fence lines are not the true boundaries he should ask his solicitor to search the title. If there is still doubt the services of a surveyor may be required.

On the basis of the printed wording of the sale and purchase forms the cost of proving the boundaries is the responsibility of the purchaser but, if the vendor is induced to absorb these charges, a clause may be written into the contract to this effect.

The completion of the sale and purchase agreement and the passing of the property to the new owner may not be the end of the matter if the buyer discovers that the vendor has been untruthful.

Although the vendor is not required, under the standard agreement we have mentioned, to define the boundaries he or his agent may leave themselves open to action if it can be proved

that either has knowingly told an untruth regaring the true lines or delineation of the piece of land. This also applies to misrepresentation of any sort on the part of a vendor or his agent. For example, the standard agreement was amended recently to include a warranty that all construction and alterations carried out on the property during the term of ownership of the vendor complied with building permit requirements. Real estate agents have been advised to draw the vendor’s attention to this provision, and to point out that it would be very unwise to sign the agreement if there was any doubt about compliance.