By Frank Newman on 23rd June 2014
An article appearing in the NZ Herald on 10 June, House buyers in dark over past, raised some interesting issues for home buyers.
It reported on a matter before the Real Estate Agents Disciplinary Tribunal. In this case a previous tenant committed suicide in a garage on the property, about a year before the property was purchased as a home by the complainants.
The buyers bought the property not knowing about the suicide and sold it five months later, still unaware; they only found out about the suicide later after talking to a neighbour. The specific reason for selling was not stated but they told the tribunal they felt “uneasy in the property and that it was dark and felt sad and depressing”, which presumably they attributed to some spooky spiritual forces.
They told the tribunal they would never have bought the house had they known a tenant had taken his life on the property, and sought compensation from the agent because they believed it should have been disclosed to them by the agent.
In their defence the agent said they knew about the suicide but excluded it from the marketing material for a number of reasons, including that it was a personal matter for the former tenants and had no relevance to the condition of the property.
The Real Estate Agents Disciplinary Tribunal took a different view, saying the agent should have disclosed it, but the Tribunal declined to award any damages.
Unfortunately that ‘bob-each-way’ view adds no clarity at all to the matter. Trying to anticipate a prospective owners sensitivities in matters such as this is, in my view, unreasonable and places an agent in an impossible situation. An agent should have no regard to spiritual issues, which are personal and diverse, and it would be impossible to second guess what spiritual issues may be of concern to a prospective buyer. Where does one stop and start with the disclosures? Should agents also disclose if someone has died of natural causes on the property? Or crimes, like murder or sexual abuse?
In my view agent disclosures should be limited to material issues relating to the property itself. It is for the tenants to do their own checks on matters to do with the behaviour of previous occupants should that be a concern to them. They could do that by specifically asking the agent or chatting with neighbours, before they make a commitment to buy.
For the record, agents are required to disclose known faults in a property. There is a grey area of debate about whether known potential factors should also be disclosed, for example, a neighbour being gained consent to build that would block a view or sunlight.