We have discussed the notion of “caveat emptor” (let the buyer beware) in other modules. For our context here, it should be noted that vendors and their agents are required only to provide information required by law. This would include any notices on the property such as fencing notices, heritage notices, housing-improvement notices, health notices, kerbing and footpath notices. In many cases, purchasers do not study or understand the statutory notices.
One of the requirements for the vendor in real estate contracts is to state whether there are any known encroachments on the property. The cost of obtaining a survey from a licensed surveyor may be considered expensive by some vendors and so they can state that there are no known encroachments in relation to the property. No encroachments means that the boundaries of the property (including fences, paths, driveways and constructions) do not encroach on either adjoining properties, public property (footpaths and roads) or easements. However, following settlement, it may be revealed that this is not the case. A purchaser is then faced with the time-consuming and costly task of establishing responsibility and/or compensating adjoining owners or taking action where other properties encroach on the purchased property.
There are several preventative measures in relation to encroachments that can be taken prior to settlement, including:
- Seeking advice from the solicitor or conveyancer to ensure that any statement by the vendor in relation to encroachments will provide some protection for the purchaser in the case of future claims of encroachment by adjoining property owners or the requirement for the purchaser to take action to have an adjoining owner make good any encroachment on the purchased property.
- Ensuring, as a condition of a contract, that the vendor obtains a current survey certificate in relation to the property from a licensed surveyor.
- Talking to adjoining owners and government authorities to identify any possible encroachments known.