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Sneaky clause could cost home sellers, says MP
5:16AM Tuesday November 20, 2007
Leaky homes and a clause in real estate contracts can cost unwitting house sellers hundreds of thousands of dollars many years down the track, says National MP Bob Clarkson.
Mr Clarkson, a builder, said today he knew of a case in which a woman had a house built in 2002, lived in it for two years and sold it in 2004.
In 2007, the new owner found the house was leaking and sued the original owner for repairs.
"Normally, the original owner would then hand the claim on to the builder of the house, but in this case the builder had gone broke and closed his company," Mr Clarkson said.
"What the original owner didn't know was a clause in the sales contract made her liable as `the last one standing'.
"The woman had sold her house in 2002 for $270,000 and now faced a bill of $210,000 for repairs."
Mr Clarkson quoted the terms of an Agreement for Sale and Purchase of Real Estate.
"While this clause was originally included to cover new owners against buying a building that had been extended without consent, lawyers are now using it to attack previous owners for leaky home liability when the builder has gone broke," he said.
"This is a real case of `buyer beware'. I am urging all sellers of real estate to have this clause deleted."
Mr Clarkson said it was exploitation of innocent home sellers, which he blamed on the Government's "disgraceful progress on addressing the leaky homes issue".
- NZPA
5:16AM Tuesday November 20, 2007
Leaky homes and a clause in real estate contracts can cost unwitting house sellers hundreds of thousands of dollars many years down the track, says National MP Bob Clarkson.
Mr Clarkson, a builder, said today he knew of a case in which a woman had a house built in 2002, lived in it for two years and sold it in 2004.
In 2007, the new owner found the house was leaking and sued the original owner for repairs.
"Normally, the original owner would then hand the claim on to the builder of the house, but in this case the builder had gone broke and closed his company," Mr Clarkson said.
"What the original owner didn't know was a clause in the sales contract made her liable as `the last one standing'.
"The woman had sold her house in 2002 for $270,000 and now faced a bill of $210,000 for repairs."
Mr Clarkson quoted the terms of an Agreement for Sale and Purchase of Real Estate.
"While this clause was originally included to cover new owners against buying a building that had been extended without consent, lawyers are now using it to attack previous owners for leaky home liability when the builder has gone broke," he said.
"This is a real case of `buyer beware'. I am urging all sellers of real estate to have this clause deleted."
Mr Clarkson said it was exploitation of innocent home sellers, which he blamed on the Government's "disgraceful progress on addressing the leaky homes issue".
- NZPA
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