The CLP have early last week indefinitely held the legislation pertaining to the introduction of Compulsory Disclosure Documentation for every home for Sale in the NT. This was set to be implemented at the end of October,2012 and was initially proposed as a measure to stop gazumping. Gazumping is a practice whereby purchasers of a property submit a price higher than that which the owner of a property has already accepted with another purchaser. This is not a very common practice in the industry. In fact it is so uncommon that I have never seen it occur in my 25 years running agencies around Australia. Add this to the fact that the proposed legislation did not actually address the problem of gazumping, did nothing to prevent it and was poorly written as it pertained to Disclosure and that makes it the right choice by the CLP to scrap the existing legislation.
In saying this there is no reason that Compulsory Disclosure Legislation should not be pursued by the new government as it protects both buyers and sellers of property if implemented correctly. Vendor Disclosure flies in the face of the basic principle of selling which is ‘Caveat Et Emptor’ or buyer beware! However we need to face up to the facts that we have come a long way since the Latin language was fashionable and move with the times. One of the main problems which needs to be addressed before any effective Disclosure can be made by home owners to potential buyers is where the manpower will be found to conduct the building inspections which highlight coding problems especially as they pertain to Cyclone ratings in the NT. Currently there are insufficient inspectors qualified to carry out this task and several are not prepared to insure against the risks involved with conducting such reports.
It is a real problem which needs to be solved before anyone in the Territory will be able to successfully implement any legislation that will really protect the risks associated with buying established homes and something that will take a fair while to address. In the meantime there will be a lot of property sold in the NT so make sure that you pay attention to what you are buying as ‘Caveat Et Emptor’ will be alive and well for a fair while yet.