Purchasing a property is a huge financial decision, one which shouldn’t be taken lightly. Hence why exercising caution is needed before making such an investment.
One phrase you will come across is ‘Caveat emptor’, but what exactly does it mean? Read on to learn more about what precautions you need to take before purchasing property.
What does caveat emptor mean?
Caveat emptor is Latin for ‘let the buyer beware’. An old-fashioned phrase still relevant to transactions today. This concept is used to protect sellers from liability, placing due diligence on the buyer.
How does this affect potential buyers?
As with any type of purchase, you don’t always know what you’re getting. There may be hidden problems underneath the exterior. The caveat emptor principle requires the buyer to conduct their own investigations of a property before signing any form of contract.
This includes researching the neighbourhood, checks for any potential legal issues, or enquiring about any renovations made.
How does this affect the seller?
The principle of caveat emptor means that sellers are not held responsible for any issues or defects with the property. In other words, buyers must take full responsibility for their own decisions prior to purchasing a property.
For example, if a buyer failed to inspect the property before purchase, only to find issues with it later, the seller is not liable. In other words, they cannot be held responsible for the buyer’s lack of due diligence.
What if I don’t research the property?
Ensure you know exactly what you’re buying, and that you are comfortable with all aspects of the property before signing anything.
Failing to inspect the property early, could see you liable for any unexpected issues that arise after the purchase. This can be costly.
The main option is to hire a surveyor to inspect the property before signing any agreement. They can help identify any missed issues with the property, also providing information about size, layout, and condition.
The importance of surveys
When buying a property, it’s crucial to perform thorough inspections and surveys beforehand. Simply relying on the information provided by the sellers can lead to potential issues down the line.
Inspecting the property allows you to identify any existing or potential problems. This includes checking the structural integrity, plumbing, electrical systems, and overall condition of the property.
A land survey can help determine the exact boundaries of the property and ensure that there are no issues or disputes. For example, the property may have shared boundaries or if there are existing structures or fences not accurately represented.
Unaware of issues after purchase – what are my options?
If you’ve purchased a property and find that there are issues that were not disclosed by the seller prior to closing, you may be able to pursue legal action. However, this isn’t a straightforward process.
In legal terms, there are three main types of misrepresentation:
- Fraudulent misrepresentation – occurs when a false statement is knowingly or recklessly made. For example, if the seller claims there are no defects with the property despite being fully aware.
- Negligent misrepresentation – occurs when a statement is made carelessly or without reasonable grounds for believing its truth.
- Innocent misrepresentation – happens when a statement is made without any fault, and the party who made the statement can prove reasonable grounds for believing it was true.
If you feel you have a case of misrepresentation, please feel free to contact any of our offices.
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