Otago Property Investors Association Inc

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26-06-2012

Reform bill a good move: Association

Landlords.co.nz

An organisation set up to fight for the rights of the owners of leaky homes says the Consumer Law Reform Bill is a welcome step for property investors and home buyers.

By Susan Edmunds

John Gray, president of the Home Owners and Buyers Association of NZ, said it would provide buyers with a greater level of security about the accuracy of information they were provided by agents.

The bill has been in the news because of a submission to parliament by REINZ chief executive Helen O’Sullivan.

She said it could cause confusion rather than protect consumers. She said it was too onerous for real estate agents to have to substantiate their statements at the time of making them.

Gray did not think that was the case.

“It simply means that they will have to implement new systems pertaining to the acquisition and distribution of information about any property they are marketing.”

But he said there was still a lack of focus on determining the condition of any home.

“Given the lack of experienced and competent pre-purchase inspectors out in the market this remains a huge hole in the system that would otherwise provide the buyers with the level of information that they require to make a fully-informed decision about the biggest transaction they are generally likely to make in their lives.”

He said in that area, agents had his sympathy. Incompetent pre-purchase inspectors without indemnity insurance could leave agents vulnerable.

“They are being held responsible for not providing adequate information about the quality of the homes they are selling … the agents are going to get burnt for having passed on those reports if a buyer is induced to buy as a result of reading the report thinking that the house is okay but finds out when it’s too late that it is not.”

He said agents could also be caught out if the vendor was determined to deceive.

“This could inadvertently cause even the most respectable agents to get caught under the new law.”

Gray said he knew of one case where a seller bought a leaky home, got the cracks in the cladding filled in and the exterior painted.  They then replaced the swollen skirting boards, laid new carpet and repainted the entire interior and ran commercial dehumidifiers for several weeks before putting it on the market in a period where there had been very little rain.  “The agent was none the wiser until another agent from a different firm rang to say that it had been sold earlier at a knock-down price because it was a leaker.”

Because it had been dried out, it passed the thermal imaging scan.

Gray said the focus needed to be on arming good agents with the right tools and educating them about how to obtain the necessary information.

“It is also about educating the buyers as to what steps they should take to protect themselves, also.”

Tags: consumer law reform bill - john gray

Source: Landlords.co.nz

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