- Back in 2015, a young female buyer purchased a ground floor unit in a 20-unit Perth strata complex for $390,000
- Between purchasing the property and moving in, she became aware of a neighbours highly antisocial behaviour
- The court has determined the buyer should have been made aware of the neighbour, and serves as a reminder to perform due diligence
A recent WA Supreme Court decision has ruled that a buyer had the right to cancel a property due to the presence of a belligerent neighbour.
Back in 2015, a young female buyer purchased a ground floor unit in a 20-unit Perth strata complex for $390,000.
It wasn’t until just before the buyer moved in she became aware of the neighbour after tradespeople mentioned his disorderly behaviour towards them while performing renovations.
Further enquiries revealed the neighbour – who has lived in the same unit since 1980 – has a long history of causing problems in the complex. The problematic behaviour is well recorded in the minutes of Owners Corporation meetings.
The neighbour had been subjected to restraining orders and accused of common assault and disorderly behaviour towards other occupiers of the complex.
During the contract of the sale, the vendor indicated that “…the seller does not know of anything which will materially affect the buyer’s use or enjoyment of the strata lot or of the common property comprised in the strata scheme.”
A previous tenant of the unit told the court he and his partner averaged one call per week to police relating to the neighbour’s behaviour during their eight-month tenancy at the property.
While the case highlights the need for buyers to remain diligent it also noted that home vendors are obliged to disclose anything a reasonable purchaser would need to know. But buyers can take steps such as requesting Strata Inspection Report prior to making an offer on a unit.
“The purchase of a Strata Inspection Report is a fundamental part of your due diligence when buying into any Strata, Community Title or Company Title building,” said Ray Ellis, First National Real Estate chief executive, who added such a report is as critical as a building and pest inspection when purchasing starta property.
“Such reports reveal all manner of material facts about the building you are considering. Buyers can expect to see minutes of Owners’ Corporation meetings, where disputes between neighbours are likely to be discussed, as well as other concerns like building defects, drainage problems or upcoming special levies.”
Ray Ellis, First National Real Estate
Mr Ellis noted that while real estate agents have a duty to disclose any material fact a purchaser should know, a homeowner may not have told them everything they should know about a property.
“Homeowners, as the WA case reveals, might withhold information detrimental to the value of their property, but they do so at substantial risk.
“In this case, a simple $250 report might have helped the buyer avoid the neighbour’s irrational and unacceptable behaviour ruining her dream home, and the home seller the loss of their sale plus a half million dollar plus compensation claim.”
Currently, the case is pending appeal, with the plaintiff calculating a compensation claim of $527,627.82. The court has been unable to determine the fair value of the property had the conduct of the neighbour been taken into account of the time.
“The moral of the story is clear,” added Mr Ellis.
“If you’re buying an apartment or a house, always get a Strata Inspection Report as well as a building and pest inspection, and with houses, always knock on doors and talk to neighbours before buying into the neighbourhood.
“And for homeowners, think twice before withholding information that you know has the potential to seriously affect your purchaser’s enjoyment of your property. If you don’t, you may well find that your sale falls apart, years into the future,” he concluded.
The Property Tribune has chosen not to disclose the names of the parties involved, including the name of the neighbour, or the address of the unit in this article.
