Who is at fault with due diligence?

Hi Experts

I was hoping if anyone can help me out here.

I recently bought a property in SE Melb. The property is a corner block, decent size for knockdown existing single level house and building a 2storey townhouse.

Before buying/signing CoS, I emailed my conveyancer(referred by broker) to check if there is anything on S32/CoS that may restrict us to go with knockdown & rebuild plan. She came back suggesting there is nothing.

After signing CoS and before settlement, couple of mates suggested to start the planning process. Hence I engaged with a town planner. He looked at S32 and said that this house is a result of subdivision done 30+ years ago with the behind property. The way it was done - it has provided the title for house only and left everything else as common property.

This was a shock to us, as 1)physically the houses are completely separate, 2)the house was advertised with the whole lot including the front & back yard and 3) conveyancer saw the whole document and did not point this out.

The solution we are being told, is to engage a land surveyor and get him to apply for something called "development under subdivision act". It needs "unanimous consensus" from adjoining property owner, which fortunately, we have "in-principle".

In hindsight, with this information known, I feel we may lose a part of the land to the neighbor, as their eves are overhanging on our backyard. We may lose about 10-20sqm.

Question - who is at more fault here? Us, conveyancer, real estate agent?
We did our due diligence by asking the expert and relying on correct advertising from the real estate agent. I agree that we should have asked probing questions. But had we known such things happen, we would have asked. But we did not know.

If we do lose part of the land, is there a legal case here for asking compensation from either the conveyancer or the real estate agent?

We will surely seek a proper legal guidance, but I need some indication from experts here.

If there are any Property lawyers here, please let me know and we can discuss in detail.

Thank you

 

A conveyancer isn't a property lawyer of town planner.
I would argue that due dilligence should have been done before the purchase by consulting the town planner and conducting the relevant searches.

 

I agree, we should have asked for searches, had we known there could be such a situation. But all the info that we discovered was right in S32 pages provided to the conveyancer. This, we believe, should have been picked by conveyancer. They should have suggested us, that we are not buying the whole lot, only the built house area is on the tile.

Is that not a conveyancer's job?

 

Of course encroaching is not the intention.

What we fear is that when land surveyor comes back with recommendations of drawing the boundaries, we may have to give away some of our land that we bought.

And that is what we need to be compensated for by 1) the conveyancer because she was suppose to warn us about title or 2) the agency as they falsely advertised whole house under the title.

So only if we lose the land OR not able to build as per the design, only then we want to seek for compensation of the lost land that we "supposedly" paid for thinking to be part of the purchase of the house.

Thanks

 

What more due diligence can a lay man do other than relying on the experts like the conveyancer?

 

probably should have been engaged prior to purchase
I wonder why your conveyancer didn't recommend this in the first instance

i'm assuming this ie either strata title or community title ?

 

Do buyers need to ask for more searches? The details on S32 are not enough for conveyancer to say -"you only get title of the house and not the whole property"?

 

That is my concern too - are the conveyancers not qualified to check or even re-confirm with us about our awareness that the house is on the title?

 

I don’t think that your issue is that the house is not on the title you bought but rather you thought you had more land than was transferred to you. The issue you might struggle with is establishing what damages you have suffered. If the property is worth what you have paid then there won’t be much loss ie you contracted to buy x and you bought x. The issue is you thought your contract was to buy y.

 

did the conveyancer recommend Title insurance?

 

Also, is the fenceline on your boundary ?
If the neighbors eave is overhanging the actual boundary then how was the original subdivision approved ?

 

Is bank responsible? the title is with the bank

 

That is absolutely correct. We are only worried that we will have to let go of some of the land that we "thought' we paid for. We just hope to get compensated for it.

 

Yes we have Title insurance. But how will that cover something that is not on our title i.e. the common property.

 

This was a subdivision done 30+ years ago. We don't know the thinking of the people who acted upon the process.
No, technically the boundaries are not drawn



This is how it looks like.

All Blue coloured area is Common property and only the houses are under the title.

 

Yes, Bank has the title.

 

Wouldn't have this been deadset obvious to you when you bought though?

Really this turns on exactly what you asked your conveyancer, and exactly how they answered.