Should a property buyer get a discount because the seller left too much rubbish behind? Which case won?
Contract for sale notes the presence of rubbish at the property
A property in North Bondi was sold at auction on 21 November 2013 for $4,400,000.00. Settlement of the contract was delayed but ultimately took place on 13 March 2014.
The contract for sale of the property noted that there was a substantial amount of “equipment, building materials and rubbish in and about the property” and included a special condition that “the purchaser agrees that the vendor will have given vacant possession of the property even if … equipment, building materials or rubbish are located in or about the property on the completion date”.
Buyer alarmed by state of property at settlement
The buyer had inspected the property prior to the auction and observed the state it was in at that time. However, he was alarmed to discover when he inspected the property again just prior to settlement some three months later that it was in a much less tidy state, with greater quantities of rubbish strewn throughout the property.
Nevertheless, the parties agreed that settlement should proceed and that some monies would be kept aside while any claims were resolved between the parties.
Buyer seeks reduction in purchase price
Under the Conveyancing Act 1919 (NSW), a purchaser is entitled to a reduction in the purchase price where the land they are buying is “damaged” in the period between the making of a contract for the sale of the land and the time at which the property passes to the purchaser. Where damage has occurred, the price is to be reduced by such amount as is “just and equitable in the circumstances”.
The purchaser alleged that the land had been damaged within the meaning of the Conveyancing Act and sought a refund of some of the purchase price. The vendor disagreed, and the matter came before the court for determination.