Why Home Buyers Can’t Rely on Consumer Protection
From an overall standpoint, Australian consumers are strongly protected by legislation. Common law is designed to cover all manner of contexts, while many different policies have been introduced by the Government to support specific industries. But bureaucracy often stands in the way of these measures, leading to exploitation of the process and a system that is far less favourable to the home buyer than it should be.
What’s in place to protect home buyers?
Building industry regulations such as the Home Owners Warranty policy have been introduced in an effort to protect home buyers from defects in newly constructed buildings. However, despite the positive intention of this industry-specific legislation and general consumer law, most measures are poorly implemented or subject to manipulation. In practice, they do not favour the home buyer in a system that is already stacked heavily against them.
Warranty claims are a maze not worth navigating
One of the major problems for home buyers in regard to these regulations is the difficulty involved in submitting a claim to the builder or their insurer. Most builders and insurance bodies are experts at dealing with claims and, on the balance of probabilities, will be more prepared to deal with the complaint process than you are. Through a combination of defence, avoidance and other abuses of process, they commonly wear home buyers down to the point where only the most resilient and vigilant complainants achieve any sort of outcome after a long and arduous battle. Even those who push on through the procedures and reach a result often wish they had never tried in the first place.
Don’t be fooled by newly constructed homes
Many house hunters assume that building inspections are only necessary for older structures. After all, new buildings are always constructed according to current standards, right? Wrong. While there are comprehensive standards in place to ensure buildings meet a certain standard, there are many instances where even new homes have been sold for far more than they are truly worth due to shortcuts or loopholes in the building process. Many first home buyers get excited at the prospect of owning their dream home that they sign on the dotted line only to find that they have to spend thousands rectifying defects they weren’t initially aware of.
How a building inspection can save you the trouble
Despite everything, it isn’t all doom and gloom. Defect reports from an independent building inspector are an extremely powerful negotiating tool in the buying process, and can allow you to purchase a home at a price that reflects its shortcomings. These extra savings in your pocket can then be used to pay for any rectification work yourself.
If you choose to take on the system with a claim and are lucky enough to succeed, you will ultimately achieve a similar outcome—but not without the time, money and frustration involved in submitting a claim. Being proactive with a building inspection puts you in a position to either negotiate a fair price before making a purchase or turn your back if the vendor won’t budge.