When purchasing a property, it is important for a Buyer to rely on their own enquiries and investigations to satisfy themselves with the state of the property. However a Seller does have a legal obligation under the Conveyancing Legislation to disclose any latent defects in a property to a Buyer. In contrast any patent defects do not need to be disclosed by a Seller to a Buyer. So, what is the difference?
Latent Defects – Seller’s Prescribed Warranties
A latent defect in a property is a defect not discovered and not discoverable upon inspection, for example plumbing issues and termite infestation in concealed areas. A latent defect also includes a hidden defect in the title to land, for example an incorrect property description.
The Conveyancing Legislation lists a number of prescribed warranties which a Seller warrants, unless otherwise disclosed in the Contract, do not affect the land as at the date of the Contract. Some of these warranties are as follows:
- there are no adverse affectations affecting the land, for example a proposal by Roads and Maritime Services to realign or widen a road or railway nearby the property
- the Council Planning certificate attached to the Contract specifies the true status of the land
- there is nothing that would justify the making of any upgrading or demolition order for any structure on the land
- if the land is in a coastal area, that it is not subject to an annual charge for coastal protection services
Patent Defects – Buyer’s Own Enquiries
A patent defect is a defect visible to the eye. For patent defects, the principle of Caveat Emptor applies,let the Buyer Beware. A Buyer must satisfy themself with a property and can do so by considering obtaining one or more of the following:
- Building Inspection Report - for any structural defects
- Pest Inspection Report - for any termite infestation or damage
- Survey – to check the property is within its boundaries or any encroachments by adjoining properties
- Strata Report – if the property is a unit, to verify account balances, levies and building maintenance
As a Buyer it is important to understand whether there are outstanding issues, including any defects, before you enter into the Contract.
This article is general information only and should not be relied on without obtaining further specific information.