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Is there a non disclosure law in New Zealand?

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  • Is there a non disclosure law in New Zealand?

    Let just say, I want to sell a house. House has lots of damage. I let everyone check my house. They have hire someone to check the house. The checker call it a clear. They bought the house after sometime house has leak after a big rain.

    Can they chase me for repairs? Or I am already free of the responsibility.

  • #2
    Hi Tokssi,

    Did you know the house has a leak? We get many 'big' rains so I suspect the answer is 'yes' and this is where you are 'obligated' to disclose it.

    I don't know if you 'have to' or you're just 'obligated to' reveal what you know. RE Agents and Conveyancing lawyers etc will know for sure your legal standing re. disclosure of what you know is wrong with the property.

    The Real Estate Agency Authority site is saying 'obligated' and 'should' but not 'must' and 'it's illegal not to'.

    cheers,

    Donna

    When you are listing a property that you suspect has weathertightness issues you will have disclosure obligations you will need to satisfy which are outlined on this page.
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    • #3
      Hello Donna thank you for this.

      So what I understand if I am a buyer even if you do a due diligence and the house you buy has a leak problem, you can chase the seller?

      So as a seller, like even I have put up inspector of the house and choose the one with a less damage report, this will still not work.

      I'm just thinking of scenarios that probably will happen.

      Thank you.

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      • #4
        Originally posted by tokssi View Post
        So as a seller, like even I have put up inspector of the house and choose the one with a less damage report, this will still not work.
        That depends on what you mean by "inspector."

        I presume you mean a licensed building inspector. If the buyer relies on the report generated by said licensed building inspector and the buyer subsequently finds serious defects in the purchase which were not detailed in the inspector's report, the buyer's claim would be against the licensed building inspector, rather than you.

        That's my general opinion, only, and would likely not apply to a builder's report.

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        • #5
          Yes, it's arbitrary. What is a serious leak for example? When is it a seller's (vendor) problem? I suspect you'd need to read the Ts&Cs from the building inspector too as I would say there will be a non-liability clause in there somewhere.

          See the link below - I found this case law of vendor liability for a leaky home.....

          However, although the vendor did not know this at the time, the unit was, in fact, leaking, and it was a leaky building. Because of latent defects, the unit had been leaking for some time, causing extensive damage that was not discovered until two years after the sale was finalised.
          A recent Court of Appeal decision highlights the need for anyone selling a property to be very careful about the statements they make to a potential purchaser.
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          • #6
            So assume, buyers has a greater safetynet.

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            • #7
              This might help: https://www.settled.govt.nz/blog/dis...e-for-sellers/

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              • #8
                Originally posted by donna View Post
                Hi Tokssi,

                Did you know the house has a leak? We get many 'big' rains so I suspect the answer is 'yes' and this is where you are 'obligated' to disclose it.

                I don't know if you 'have to' or you're just 'obligated to' reveal what you know. RE Agents and Conveyancing lawyers etc will know for sure your legal standing re. disclosure of what you know is wrong with the property.

                The Real Estate Agency Authority site is saying 'obligated' and 'should' but not 'must' and 'it's illegal not to'.

                cheers,

                Donna
                Donna the real estate agents have disclosure obligations for what they know. This means they become embroiled in proceedings where they have to prove to purchaser that they didnt know (and how do you prove a negative?)

                they manage that risk by tricking vendors into filling out survey forms which ask the vendor are there any leaks. If vendor says yes then RA has to disclose If they lie then vendor commits fraud.

                So the answer is vendor doesn't have to disclose but REA does.

                Selling at auction as is alleviates some vendor risk?

                Caveat emptor should apply and did before leaky homes debacle changed the litigation landscape.

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