When buyers inspect properties at open days or prior to auction, they will generally focus on the house itself. Rarely will they inspect the boundaries of the property.
Buyers will generally assume that the boundary features (fences etc.) are correctly located on the boundaries of the property. However, this is not always the case, particularly with older properties.
The only way of determining whether the boundary features are correctly located on the boundaries of the property is to have a survey carried out.
The survey will confirm the correct location of the boundaries and reveal whether there are any encroachments by adjoining properties onto the property concerned or encroachments from the property concerned onto adjoining properties.
The standard REIQ contract permits a buyer to carry out a survey. If a survey establishes that there is an error in the boundaries of the property or there is an encroachment by structures onto or from the land concerned and such error or encroachment is material then the buyer may terminate the contract before settlement. If such error or encroachment is immaterial then the buyer’s only remedy is to claim compensation from the seller but such claim for compensation must be made by the buyer in writing before settlement.
Obtaining a survey can be a double-edged sword. If a buyer obtains a survey which shows an error or encroachment then the buyer will have actual knowledge of the problem. When that buyer comes to sell the property, failure to disclose that problem to a subsequent buyer can be a form of misrepresentation which could lead to a claim for damages.
The Property Law Act 1974 allows either of the property owners in an encroachment situation to apply to the court for an order in respect of the encroachment. The court can grant such order that it deems just with respect to:
- The payment of compensation.
- The transfer of land or the grant of an easement, right or privilege.
- The removal of the encroachment.
It is worthwhile for a buyer to consider the issue of boundaries and surveys because issues can arise which later end up as boundary disputes.
We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.
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This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.
Note that the above information is of a general nature only. Your situation should be considered by your accountant and your solicitor as there may be other issues to consider in respect of both your personal/financial situation and your asset protection strategy such that the above steps on their own may not protect you from possible claims against your personal assets.