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Common property disputes that may face property buyers before and after settlement

When buying a new or existing property, most buyers will generally expect that they will get the property they were promised in the contract. Unfortunately, it is quite common for buyers of new or existing properties to discover either before or after settlement that the house or land they got was not what they were promised in the contract, and as a result many buyers can end up in bitter disputes with the vendor or the neighbours over various issues. This article will discuss some of the most common types of property disputes that buyers may experience after settlement, and the ways that buyers can deal with them both before and after settlement.

Disputes with the vendor over defects in the property

These types of disputes happen all too often. Whether it is with a brand new off the plan development, or with an old house that has been renovated, there is always the chance that a buyer may end up discovering that there are defects with the property they purchased. These defects can relate to either the property’s title or to physical defects in the house, and they can result in the settlement of the property being delayed or cancelled, or the buyer being forced to sue the vendor after settlement.

Defects in a property’s title can include a Certificate of Title that has the wrong property owner or Volume and Folio details, encumbrances on the title such as a mortgage, charge or caveat, or hidden easements or covenants that give neighbouring properties or government bodies the right of access to the land. Most title defects will usually be picked up and resolved before settlement, as a faulty title cannot be transferred, however, encumbrances such as easements and covenants may not be spotted so easily, and they can cause a lot of problems for the new property owner.

Physical defects in a property can include obvious things such as problems with the design or construction of the house, missing furnishings and features that were promised in the contract, and failures with the plumbing and drainage systems. A buyer can spot most physical defects in a property by inspecting the property personally or by hiring an expert to conduct a professional building inspection.

Dispute with the neighbours over property boundaries

Disputes with the neighbours over property boundaries tend to happen after settlement, when a new home owner has moved into the property and discovers to their surprise that the physical boundaries of their property do not match the boundaries that were stated in the property’s title, or that part of a neighbour’s property has encroached upon their land.

These situations can arise due to a number of reasons, including errors in a previous land survey, the boundary fences being built or moved into a wrong position, or an intentional or accidental encroachment of a portion of land by a neighbour. They can result in a new home owner being caught up in a fencing dispute, or worse, having to make or defend against an adverse possession claim to a portion of their land.

To avoid getting caught up in a boundary dispute, we recommend that buyers should hire a professional surveyor to conduct a survey of the property boundaries. This survey will generally disclose to the buyer whether the physical boundaries of the property match the boundaries of the property on the title, and whether there are likely encroachments upon the property by a neighbouring property.