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Bought house - Dispute with agents. Any advice?
Hi all,
We went unconditional on a home a few months ago. The property shares a boundary with an undeveloped piece of land covered in native trees and scrub. In all marketing (online and pamphlets etc), that land was referred to as Reserve land. We took that in good faith and it was a driving factor to our purchasing the property. A few weeks after signing up, we learned that it was actually privately owned as part of a (huge) residential title further up the street.
We have discussed our rights to compensation with the real estate (RE) company. They are telling us that our sale and purchase agreement has clauses which enable compensation to be claimed from the vendors before settlement date. The entire S&P contract is the standard REINZ and ADLS, as is widely used across NZ.
The clause they refer is under Title, boundaries and requisitions:
6.4 - Except as provided by sections 36 to 42 of the Contract and Commercial Law Act 2017, no error, omission, or misdescription of the property or the title shall
enable the purchaser to cancel this agreement but compensation, if claimed by notice before settlement in accordance with subclause 8.1 but not otherwise, shall
be made or given as the case may require.
and Claims for compensation:8.1 - If the purchaser claims a right to compensation either under subclause 6.4 or for an equitable set-off:
(1) the purchaser must serve notice of the claim on the vendor on or before the last working day prior to settlement; and
(2) the notice must:
(a) in the case of a claim for compensation under subclause 6.4, state the particular error, omission, or misdescription of the property or title in respect of
which compensation is claimed;
(b) in the case of a claim to an equitable set-off, state the particular matters in respect of which compensation is claimed;
(c) comprise a genuine pre-estimate of the loss suffered by the purchaser; and
(d) be particularised and quantified to the extent reasonably possible as at the date of the notice.
We initially made a claim for compensation under these clauses through our solicitor. The vendors solicitor replied stating that these clauses are only relevant to the title that is being sold, and not to erroneous statements made about an adjacent title during the marketing of the property. Our solicitor agreed, and on that basis we retracted the claim and decided the appropriate steps would be to lay a complaint with the REA and pursue action under the Fair Trade Act, due to unsubstantiated representations made in trade. I have since received a letter from the RE company's solicitor who also note that there is an argument to be made that the misrepresentation did not include the (sale) property, so we cannot rely on clause 6.4. That makes three independent solicitors who say it is not applicable.
Despite this, the RE company continues to push us toward taking action within the S&P agreement against the vendors. They say this is the only path to an outcome that we desire (some monetary compensation). They say that the vendors are culpable: "our Vendor provided the representation to our sales consultant, all (we) have done is made that same information available to prospective buyers" and "I just need them to come back to me with your claim, and get in a room with them (vendors) so I can talk them around to an outcome of compensation". He has advised compensation will not be a likely outcome outside of the Sale and Purchase Agreement.
I believe the RE company had a duty to ensure the material they provided to potential buyers is accurate, and my impression through the entire thing is that they are trying to have us engage in a costly legal proceeding to cause us to give up. The company director has made it clear that there are initial costs we will need to cover to make a case. $500 for a letter of compensation, proof of the value of the loss (valuation) etc.
Does anyone have experience in these matters?
Is there an argument to be made for an Equitable Set Off - as the reserve land relating to the purchase of the property is not actually there?
I would also really appreciate any feedback on how a legal proceeding might look - in terms of cost and time. It is the single biggest factor limiting our taking action within the S&P agreement (as requested by the RE director). Our solicitor does not want to retract his agreement with the earlier compensation letter and lodge a new one - so we are up for $200+ for a new lawyer just to look at the file..
If you have read all of this, thank you.
We went unconditional on a home a few months ago. The property shares a boundary with an undeveloped piece of land covered in native trees and scrub. In all marketing (online and pamphlets etc), that land was referred to as Reserve land. We took that in good faith and it was a driving factor to our purchasing the property. A few weeks after signing up, we learned that it was actually privately owned as part of a (huge) residential title further up the street.
We have discussed our rights to compensation with the real estate (RE) company. They are telling us that our sale and purchase agreement has clauses which enable compensation to be claimed from the vendors before settlement date. The entire S&P contract is the standard REINZ and ADLS, as is widely used across NZ.
The clause they refer is under Title, boundaries and requisitions:
6.4 - Except as provided by sections 36 to 42 of the Contract and Commercial Law Act 2017, no error, omission, or misdescription of the property or the title shall
enable the purchaser to cancel this agreement but compensation, if claimed by notice before settlement in accordance with subclause 8.1 but not otherwise, shall
be made or given as the case may require.
and Claims for compensation:8.1 - If the purchaser claims a right to compensation either under subclause 6.4 or for an equitable set-off:
(1) the purchaser must serve notice of the claim on the vendor on or before the last working day prior to settlement; and
(2) the notice must:
(a) in the case of a claim for compensation under subclause 6.4, state the particular error, omission, or misdescription of the property or title in respect of
which compensation is claimed;
(b) in the case of a claim to an equitable set-off, state the particular matters in respect of which compensation is claimed;
(c) comprise a genuine pre-estimate of the loss suffered by the purchaser; and
(d) be particularised and quantified to the extent reasonably possible as at the date of the notice.
We initially made a claim for compensation under these clauses through our solicitor. The vendors solicitor replied stating that these clauses are only relevant to the title that is being sold, and not to erroneous statements made about an adjacent title during the marketing of the property. Our solicitor agreed, and on that basis we retracted the claim and decided the appropriate steps would be to lay a complaint with the REA and pursue action under the Fair Trade Act, due to unsubstantiated representations made in trade. I have since received a letter from the RE company's solicitor who also note that there is an argument to be made that the misrepresentation did not include the (sale) property, so we cannot rely on clause 6.4. That makes three independent solicitors who say it is not applicable.
Despite this, the RE company continues to push us toward taking action within the S&P agreement against the vendors. They say this is the only path to an outcome that we desire (some monetary compensation). They say that the vendors are culpable: "our Vendor provided the representation to our sales consultant, all (we) have done is made that same information available to prospective buyers" and "I just need them to come back to me with your claim, and get in a room with them (vendors) so I can talk them around to an outcome of compensation". He has advised compensation will not be a likely outcome outside of the Sale and Purchase Agreement.
I believe the RE company had a duty to ensure the material they provided to potential buyers is accurate, and my impression through the entire thing is that they are trying to have us engage in a costly legal proceeding to cause us to give up. The company director has made it clear that there are initial costs we will need to cover to make a case. $500 for a letter of compensation, proof of the value of the loss (valuation) etc.
Does anyone have experience in these matters?
Is there an argument to be made for an Equitable Set Off - as the reserve land relating to the purchase of the property is not actually there?
I would also really appreciate any feedback on how a legal proceeding might look - in terms of cost and time. It is the single biggest factor limiting our taking action within the S&P agreement (as requested by the RE director). Our solicitor does not want to retract his agreement with the earlier compensation letter and lodge a new one - so we are up for $200+ for a new lawyer just to look at the file..
If you have read all of this, thank you.
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