Building Inspection - House to be Auctioned

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eracode

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#166363 11-Mar-2015 06:47

A potential purchaser gets a pre-purchase building inspection done and the inspection report shows high moisture readings in one part of the house. The buyer advises the Agent that this problem has been found. Is the Agent then obliged to advise other potential buyers (i.e. the bidders at the auction) that this problem has been found?

Would appreciate advice.

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#1255086 11-Mar-2015 06:55

Yip.

http://www.reaa.govt.nz/News/NewsletterLinkedPages/Pages/June%202014%20Newsletter/Disclosure-of-building-reports.aspx

Jase2985

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#1255088 11-Mar-2015 06:59

just a question but why did the buyer tell the agent?

throbb

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#1255120 11-Mar-2015 09:27

Jase2985: just a question but why did the buyer tell the agent?

Gives the buyer better bargaining power, if you have the agent telling other potential buyers there was a building report done and there were some moisture issues, it lowers there perceived value of the house.

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#1255178 11-Mar-2015 10:23

The agent does NOT have to tell anyone UNLESS they are asked.

bagheera

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#1256114 11-Mar-2015 10:28

Yes, and now that you know about it, if you change agent later and not tell them, then sell the house and the buyer finds out about the report, you would be liable for the repair cost. You need to disclose this, or could be in for big repair bill.

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#1256118 11-Mar-2015 10:30

The agents know what to do. That's why you pay them half your mortgage

eracode

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#1256380 11-Mar-2015 15:29

joker97: The agent does NOT have to tell anyone UNLESS they are asked.

Thanks for the responses guys. However I am confused. The link provided by wellygary above seems to make it clear: "Licensees are expected to advise prospective purchasers when a previous building report has detected problems with a property." This seems to imply that the agent has an obligation to proactively advise other prospective buyers if the Agent is aware of a defect.

Then joker97 contradicts that with the comment quoted above.

Any further light?

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#1256394 11-Mar-2015 15:41

eracode:
joker97: The agent does NOT have to tell anyone UNLESS they are asked.

Thanks for the responses guys. However I am confused. The link provided by wellygary above seems to make it clear: "Licensees are expected to advise prospective purchasers when a previous building report has detected problems with a property." This seems to imply that the agent has an obligation to proactively advise other prospective buyers if the Agent is aware of a defect.

Then joker97 contradicts that with the comment quoted above.

Any further light?

Joker97 is wrong in this instance. The REAA website is clear. Good luck.

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#1256466 11-Mar-2015 17:02

Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

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#1256483 11-Mar-2015 17:17

joker97: Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

but then how would you know?

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#1256488 11-Mar-2015 17:19

IANAL, and you should get legal advice. However usually these days agents (at least the better ones), will get the seller and buyer to sign a disclosure notice as part of the contract which lists all known defects and issues. eg if something hasn't got a consent that needed one etc This is more difficult with Auctions though. Not sure how they are handled.

Has the inspector told you why it may have a higher reading. Unfortionalty many of these inspectors these days are just box tickers, using a standard for, and they can miss the obvious. You really need someone who has done actual building and has years of experience.

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#1256489 11-Mar-2015 17:20

Jase2985:
joker97: Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

but then how would you know?

Make sure you ask it in writing, but if you do it verbally, record them.

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#1256501 11-Mar-2015 17:29

Jase2985:
joker97: Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

but then how would you know?

i attend hundreds of open homes. i don't see the agents
- advertise - leaky home, come buy this leaky home that needs new carpets and has 3 loose screws in the laundry. have you?
- during open homes - say ah this needs doing that needs doing this is no good that doesn't work, by the way the garage is not consented
- at the auction - this is a leaky home, the building report shows the roof is old, the floor is creaky, the laundry needs 4 screws, the fences is slanted, the driveway has cracked. do i have an opening bid

have you?

what they normally do
- say nothing and smile
- if you ask them has there been any previous building reports with issues - they will say yes there has been etc etc etc
- some agents advise you to get your own report done.

a report of moisture. what does that mean? that there is a shower in the house? that the house is a leaky house? that the house might be a leaky house? that the house was a leaky house? that the house will be a leaky house the in future? that someone sprayed the wall with water???

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#1256513 11-Mar-2015 17:38

joker97:
Jase2985:
joker97: Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

but then how would you know?

i attend hundreds of open homes. i don't see the agents
- advertise - leaky home, come buy this leaky home that needs new carpets and has 3 loose screws in the laundry. have you?
- during open homes - say ah this needs doing that needs doing this is no good that doesn't work, by the way the garage is not consented
- at the auction - this is a leaky home, the building report shows the roof is old, the floor is creaky, the laundry needs 4 screws, the fences is slanted, the driveway has cracked. do i have an opening bid

have you?

what they normally do
- say nothing and smile
- if you ask them has there been any previous building reports with issues - they will say yes there has been etc etc etc
- some agents advise you to get your own report done.

a report of moisture. what does that mean? that there is a shower in the house? that the house is a leaky house? that the house might be a leaky house? that the house was a leaky house? that the house will be a leaky house the in future? that someone sprayed the wall with water???

I have seen some advertised like... this magnificent home has some weather-tightness issues..., which is disclosure.

Yes, and an inspection that only says there is higher moisture in certain areas, is unhelpful really. They need to look into it more. Often with little investigation, you can find out what is causing it. Moisture when we haven't had much rain for months could mean leaky plumbing, and if it is an 80-90's house, it maybe that black plumbing that is leaking. If that is what it is, it could mean structural problems with potentially rotten framing. I would get a more indepth inspection, which removes linings to see what is causing it. If the seller has to disclose it, they will also want to know what is causing it, unless someone is buying it for the land.

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#1256541 11-Mar-2015 18:41

joker97:
Jase2985:
joker97: Why don't you ask the agent. I've never heard an agent disclose anything unless you asked them.

but then how would you know?

i attend hundreds of open homes. i don't see the agents
- advertise - leaky home, come buy this leaky home that needs new carpets and has 3 loose screws in the laundry. have you?   ?   - Ive seen plenty and im not even really looking for a house, but you are not in Auckland where the issue is a lot more prevalent
- during open homes - say ah this needs doing that needs doing this is no good that doesn't work, by the way the garage is not consented   -   because how do they know? The owner doesn’t get a building inspection before the sale, nor do the owners get a LIM. About 20-25% of the places we looked at had LIMS avaliable pre sale and even then it wasnt the whole thing just a basic overview. Meaning the info is required after the conditional/unconditional agreement has been signed.
- at the auction - this is a leaky home, the building report shows the roof is old, the floor is creaky, the laundry needs 4 screws, the fences is slanted, the driveway has cracked. do i have an opening bid      -   At an auction who generally gets the building report? The seller or the buyer? 9 times out of 10 it’s someone whos interested in buying, not the seller. So again how does the agent know this info unless the buyer tells them?

a report of moisture. what does that mean? that there is a shower in the house? that the house is a leaky house? that the house might be a leaky house? that the house was a leaky house? that the house will be a leaky house the in future? that someone sprayed the wall with water???

See above for my replies to your comments

have you ever had a moisture test done on a house? doesnt sound like it from those comments. it tests the moisture content in internal timbers/framing plus some other tests, so not likely to come from the shower.

how many leaky homes are there in Dunedin?

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