In a recent Supreme Court Decision of Huang v Ceylan [2018] NSWSC 306, the Court considered the Vendor’s obligation under Section 52A(2) of the Conveyancing Act and the Statutory Warranties that require disclosure of various relevant “matters”.
In that case the Court considered the warranties set out in Schedule 3 Part 1 of the Conveyancing (Sale of Land) Regulation requiring the Vendor to warrant that “there is no matter in relation to any building or structure on the land that would justify the making of an upgrading or demolition order”.
In that case the Vendor advertised for sale a three bedroom “unit”. In fact the development approval provided for the apartment to contain two bedrooms. Following that approval, a wall had been constructed along what was previously an open “media room” thereby enclosing it to create a third bedroom.
Following exchange, the Purchaser discovered the approved development plan had originally provided for two bedrooms only.
After contacting the local Council, the Council issued a notice advising that it intended to serve an order, to in effect require the Vendor to comply with the Development Consent.
The Purchaser then sought to rescind the Contract. The Vendor disputed the Purchaser’s entitlement to do so.
The Court determined that the alteration of the media room was a non compliant development entitling Council to make an order requiring removal of the wall and reinstatement of the apartment. It therefore concluded there was a breach of the Statutory Warranty and ordered the return of the Purchaser’s deposit.
The case demonstrates the need to be sure to disclose “relevant matters” when selling property.
Giles Finney has been helping people buy and sell properties on the Central Coast for over 30 years. If you need help buying or selling, please call 02 4322 6666 and ask for Giles or Deb.