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Building Code Blues: The Risks of Non-Compliance

What Property Buyers Need to Know About the Contract for Sale #23: How do I ensure compliance with building codes?

Ensuring compliance with building codes is a critical aspect of the property buying process, as it directly impacts the safety, legality, and value of the property. Building codes set the standards for construction quality and safety, and any non-compliance can lead to costly repairs, fines, or legal issues. Understanding how to verify that a property meets these codes before finalizing the purchase is essential to protect your investment. Thorough inspections and proper documentation review are key steps in this process.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Real NSW Court Case:

Court Case: Thompson v. Clark (2018)

What Happened

In Thompson v. Clark (2018), Emily Thompson purchased a property in Sydney, only to discover post-purchase that the property had multiple building code violations. The previous owner, George Clark, had undertaken several renovations without proper permits, leading to structural issues and safety hazards. Thompson faced the daunting task of bringing the property up to code, which was not disclosed during the sale.

Participant Behavior

Thompson, eager to finalize the purchase, relied on the seller’s assurances and did not conduct a thorough inspection to verify compliance with building codes. Clark, aware of the violations, chose not to disclose these issues, hoping to offload the property quickly. The solicitor involved did not perform adequate checks, leading to a problematic purchase for Thompson.

Thompson filed a lawsuit against Clark for failing to disclose the building code violations. The NSW Supreme Court had to determine whether Clark had an obligation to disclose these issues and if Thompson had taken reasonable steps to ensure compliance. The court examined the contractual obligations and the extent of the undisclosed violations.

Financial Implications

Thompson incurred significant expenses, including $40,000 in legal fees and an estimated $70,000 to rectify the building code violations. These unexpected costs placed substantial financial strain on Thompson, who also faced potential fines from local authorities for the violations.

Conclusion

The court ruled in favor of Thompson, ordering Clark to pay damages to cover the cost of rectifying the building code violations. The ruling underscored the importance of verifying compliance with building codes before purchasing a property.

Lessons Learned

  • Conduct Thorough Inspections: Always perform detailed inspections to ensure compliance with building codes.

  • Demand Full Disclosure: Ensure that the seller provides written confirmation of compliance with all relevant building codes.

  • Engage Expert Advice: Hire a qualified inspector and solicitor to thoroughly check the property’s compliance status.

References

  • NSW Government Fair Trading: [Building Code Compliance])

  • Thompson v. Clark [2018] NSWSC 634

Tags and Keywords

Building code compliance, property purchase, building code violations, NSW property law, Thompson v. Clark, legal process, financial consequences, property buyer inspections