Be careful what you say when selling a property!

February 3, 2020

in Property

The Court of Appeal has confirmed a previous High Court decision that a person selling a property who made a statement (albeit innocent) to a potential purchaser that the property did not leak upon an enquiry from a purchaser was held to have misrepresented this situation when it was subsequently discovered (nearly two years later) that the property did leak and had been leaking for sometime.

The Court was not moved by the fact that the Vendor did not believe at the time of the representation that the property was leaking. The fact that the Vendor made an unqualified assertion that the property did not leak on the purchaser’s enquiry was sufficient for the Court of Appeal to find that the Vendor was liable for the costs of remediation. It was clear from evidence that the purchaser was relying on the statement made by the Vendor when assessing its decision to purchase.

The decision confirms the already understood position that you must be careful what you say to any person looking to buy a property and if you are in any doubt or you do not definitively know the answer you should either refuse to answer or ensure that your answer is qualified to such an extent the purchaser knows it must make further enquiries.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Paul Farry
pfarry@farry.co.nz
09 353 6671

The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 

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