My property has shortcomings

In a previous article I discussed what you, as a buyer, can do if the property you purchased has defects. The article covered situations where the selling party was also the builder or construction company. This time I want to cover what you, as a buyer, can do in similar situations, but when the vendor is a private individual too.

Can the buyer hold the vendor, who has not acted in a business capacity, liable for defects in the property purchased? What are the (essential) requirements and what is the time frame in which the buyer should act?

For the sake of clarity: if the property has been purchased through an estate agent then the vendors, whether they are private individuals or a construction company, remain liable for defects. After all, the buyers will have contracted to purchase from the vendors not the estate agents, who merely acted as an intermediary.

Defective supply

Defective or poor quality supplies are items which, according to the contract, have indeed been supplied, but which have been supplied in a defective or poor condition. Hidden defects are defects to the building which may only become apparent after a period of use.

Period of limitation

The law states that the period of limitation for bringing a court case in relation to defective property is five years. This period commences on the date on which the property is registered in your name at the Tapu office. The exception to this is where there is evidence that the vendors acted deliberately. In such cases the period of limitation is extended to 20 years from the date of Tapu transfer.

Where a property is purchased via a project developer the period of limitation commences on the date the property is supplied. The date of supply is not necessarily the date on which the Tapu is transferred. In practice, it is normal to use the date on which the keys are handed over and which is recorded in the contract. Although the law does not state a specific period of limitation for this, it is normal in practice to take the general term of five years, providing this is not specified otherwise in the contract.

Duty to report

The law does not mention anything about a duty to report property defects in writing in the case of a sale between private individuals. It is, however, mentioned in the case of a sale via a business. In other words, in contrast to a purchase via a project developer, it does not constitute a prerequisite to being able to bring a court case.

In the case of a purchase made via a project developer, as long as the contract does not include anything about a buildings guarantee, the buyer must notify the organisation in writing of any obvious defects within one year of the date of supply of the property, or lose the right to claim damages in this respect. Hidden defects should be notified within one year of becoming apparent.

It is important therefore that where, in your opinion, the property supplied has obvious defects, such defects are notified in writing to the builder or construction company as soon as possible. I strongly recommend that such notifications are made via a solicitor. This also ensures that the contents of the letter are recorded officially, something that can be a major factor if a court case is brought at a later date.

Buildings guarantee clause

To avoid any confusion: the duty to report defective building work within one year applies only where the contract does not include a buildings guarantee clause. Where the contract does include a buildings guarantee clause you will be able at any time within the specified period (usually five years) to seek redress, i.e. repair or resolution of the defect, or be able to claim damages.

Conclusion

In the event of both obvious and hidden defects to a property, the buyer has a lega1l right to demand that the defects be rectified or claim damages, within five years of the date of supply. Where the property is purchased via a project developer, it is essential that the buyer first notifies the organisation in writing of their concerns, unless agreed otherwise in the contract. Of course, it is always a good idea to have the circumstances of individual cases assessed on their own merits by an expert lawyer.