Consumer rights case, what would you do?
This is a really long one sorry, but I'm at the point where I need the opinion from perfect strangers as to whether or not they would proceed with legal action and risk being even worse off financially.
December last year we made an offer on a property. We offered $50,000 over asking price but made it subject to a building inspection. I searched for a building inspector that would inspect everything and explained why we needed it done thoroughly. It's an older house so we fully expected to negotiate our offer based on problems that would be found, but wanted to have first shot at the house as lots of investors were eyeing it off. Building inspector promised no stone would be left unturned and as he was also a licenced electrician he would visually inspect more than what a normal inspector would. Fabulous!
To our shock the report came back with no major defects and no recommendations for areas that we should check further. So we continued with our offer.
After settlement we noticed defects in areas that the report clearly said had no defects. We contacted fair trading and they said to get another building inspection done and go from there. low and behold, the next building inspector found major issues with the roof, substandard and dangerous electrical work, damp in the walls, substandard floor tiles, etc etc basically this house was added to over time by a not so great DIYer.
I've started getting quotes for repairs of the defects listed and it's already over 12k, not including the roof and that doesn't include the costs for the damage they may find when they go behind the tiles with the damp in the bathroom and start investigating for additional substandard electrical works.
I emailed the business and outlined everything, i showed the discrepancies in both reports. I asked for compensation to rectify the missed defects. They replied that they did not take any responsibility and directed me to their terms and conditions which talk about there having to be visual access etc. They also tell me that they will not pay compensation under any circumstances and that the most they will do is a refund. When I told fair trading this they told me I would now need to seek legal advice and to call legal aid. Legal aid booked me a free 30min appt in a few months time, that's the best they can do in a case like this.
I then spent way too much time studying consumer law, the Australian building inspections standards and the companies terms and conditions and promises on the website.
I went back to them with a letter of demand that showed that they themselves had confirmed clear visual access in their report for areas that had defects they missed and that you can even see some of the defects in their photos (now I know what to look for) I advised them of their breach of consumer law in regards to them claiming they won't pay compensation and highlighted the consumer rights for services regarding the duty of care they had. I showed them in the inspection standards that they cited areas that they should have checked and they have included those items in their report as being checked. Its been over 21 days and I haven't received a reply.
I assume I am being ignored as I don't have a lawyer so they are hoping I will go away. I have spoken with a lawyer and her initial advice after only reading the reports and nothing else is that we may have a case but will need to prove the defects were present when the property was inspected etc. She is willing to take on the case but of course there are no guarantees. For her to review the case in full will be $660 and then she will give me her advice which will most likely be for her to write a letter of demand hoping they will finally contact their insurers and enter into mediation. This could cost an additional $2000 or so. We may also need some expert reports which is more money.
We are already broke, we can't afford to fix the defects, we bought this house with very little savings left, we told the inspectors that, I told them on the phone when we booked it that we liked the house but couldn't afford major repairs so would likely cancel the contract if anything big was found. I want to be paid in compensation the difference between what we paid and the asking price plus legal costs. There is no way we would get what we paid for the house if we sold it today, given that chances are a buyer's building inspector would find the same things the second inspector did. I cannot afford to spend this money on a lawyer though and then lose it all, but I also can't afford to fix the defects on the house, some of which are highlighted as urgent safety issues.
So, finally, I ask what would you do?
1. Proceed with legal advice and cross fingers
2. Continue to go down the legal pathway alone, I believe my next step is to file a case with Courts SA but I need to read the uniform civil laws first. We would have to go through the district civil court as I would be asking for over $12,000 so this too comes with fees and they recommend a lawyer. However, lodging the case may be enough to wake the business up and get them to enter mediation, contact their insurer etc.
3. Walk away
Thanks for reading! And if you're buying a house I recommend you get two building inspections incase the first inspector happens to know the sellers (that's my hunch after some things have come to light but I can't prove it).
This is a really long one sorry, but I'm at the point where I need the opinion from perfect strangers as to whether or not they would proceed with legal action and risk being even worse off financially.
December last year we made an offer on a property. We offered $50,000 over asking price but made it subject to a building inspection. I searched for a building inspector that would inspect everything and explained why we needed it done thoroughly. It's an older house so we fully expected to negotiate our offer based on problems that would be found, but wanted to have first shot at the house as lots of investors were eyeing it off. Building inspector promised no stone would be left unturned and as he was also a licenced electrician he would visually inspect more than what a normal inspector would. Fabulous!
To our shock the report came back with no major defects and no recommendations for areas that we should check further. So we continued with our offer.
After settlement we noticed defects in areas that the report clearly said had no defects. We contacted fair trading and they said to get another building inspection done and go from there. low and behold, the next building inspector found major issues with the roof, substandard and dangerous electrical work, damp in the walls, substandard floor tiles, etc etc basically this house was added to over time by a not so great DIYer.
I've started getting quotes for repairs of the defects listed and it's already over 12k, not including the roof and that doesn't include the costs for the damage they may find when they go behind the tiles with the damp in the bathroom and start investigating for additional substandard electrical works.
I emailed the business and outlined everything, i showed the discrepancies in both reports. I asked for compensation to rectify the missed defects. They replied that they did not take any responsibility and directed me to their terms and conditions which talk about there having to be visual access etc. They also tell me that they will not pay compensation under any circumstances and that the most they will do is a refund. When I told fair trading this they told me I would now need to seek legal advice and to call legal aid. Legal aid booked me a free 30min appt in a few months time, that's the best they can do in a case like this.
I then spent way too much time studying consumer law, the Australian building inspections standards and the companies terms and conditions and promises on the website.
I went back to them with a letter of demand that showed that they themselves had confirmed clear visual access in their report for areas that had defects they missed and that you can even see some of the defects in their photos (now I know what to look for) I advised them of their breach of consumer law in regards to them claiming they won't pay compensation and highlighted the consumer rights for services regarding the duty of care they had. I showed them in the inspection standards that they cited areas that they should have checked and they have included those items in their report as being checked. Its been over 21 days and I haven't received a reply.
I assume I am being ignored as I don't have a lawyer so they are hoping I will go away. I have spoken with a lawyer and her initial advice after only reading the reports and nothing else is that we may have a case but will need to prove the defects were present when the property was inspected etc. She is willing to take on the case but of course there are no guarantees. For her to review the case in full will be $660 and then she will give me her advice which will most likely be for her to write a letter of demand hoping they will finally contact their insurers and enter into mediation. This could cost an additional $2000 or so. We may also need some expert reports which is more money.
We are already broke, we can't afford to fix the defects, we bought this house with very little savings left, we told the inspectors that, I told them on the phone when we booked it that we liked the house but couldn't afford major repairs so would likely cancel the contract if anything big was found. I want to be paid in compensation the difference between what we paid and the asking price plus legal costs. There is no way we would get what we paid for the house if we sold it today, given that chances are a buyer's building inspector would find the same things the second inspector did. I cannot afford to spend this money on a lawyer though and then lose it all, but I also can't afford to fix the defects on the house, some of which are highlighted as urgent safety issues.
So, finally, I ask what would you do?
1. Proceed with legal advice and cross fingers
2. Continue to go down the legal pathway alone, I believe my next step is to file a case with Courts SA but I need to read the uniform civil laws first. We would have to go through the district civil court as I would be asking for over $12,000 so this too comes with fees and they recommend a lawyer. However, lodging the case may be enough to wake the business up and get them to enter mediation, contact their insurer etc.
3. Walk away
Thanks for reading! And if you're buying a house I recommend you get two building inspections incase the first inspector happens to know the sellers (that's my hunch after some things have come to light but I can't prove it).