Nasty neighbour costs owners $390k sale

PHOTO: Particularly nasty neighbours could cause a major headache when buying or selling a home. Picture: iStock

There are a lot of things that need to be considered when purchasing a home, but there is one crucial detail that is often overlooked – and it can cause major headaches later on.

House prices, increasing mortgage rates and the structural integrity of a property are often at the top of the list for those considering a property purchase.

But, a recent Supreme Court ruling in Western Australia has proven other factors – like your new neighbours – can completely derail a house sale, making it something both buyers and sellers need to be aware of.

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The ruling, handed down at the end of May this year, saw the sale of a $390,000 apartment in Perth disintegrate after the sellers failed to disclose the presence of a particularly nasty and belligerent neighbour.

The buyer successfully sued the vendor for breach of contract and fraudulent misrepresentation of the property after the sellers signed a contract claiming: “The seller does not know of anything which will materially affect the buyer’s use or enjoyment of the strata lot or of the common property comprised in the strata scheme.”

The buyer contended that, in fact, the sellers were well aware of the continued aggressive behaviour of the upstairs neighbour, as it had reportedly driven residents out of the unit previously.

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The court heard the neighbour had a long history of breaches of violence restraining orders, common assault and disorderly behaviour relating to other occupiers of the strata complex since at least 2001.

Complaints had been made against the man for repeated banging on the ceiling, “extremely” foul language and cursing, and playing music at an excessive noise level.

The court heard after the woman purchased the unit and moved in, the neighbour would be “set off” by the slightest noise, even just using the hair dryer or getting ready for work in the morning, resulting in the man banging above her and yelling abuse.

Assessors valued the flat, bought for $390,000, at just $200,000-$290,000 due to the behaviour of the neighbour.

The court agreed that the vendors had clearly known about the ongoing issue, ruling in favour of the buyer.

However, Justice Jeremy Curthoys noted in his ruling that any judgment against the vendors resulting in compensation would likely be a “Pyrrhic victory” as they would likely declare bankruptcy.

This would then leave the buyer having to cover her own hefty legal bills and no compensation.

“This case illustrates the folly of litigation,” he said in his summary.

Skeletons in the closet

Along with being aware of potentially nasty neighbours, buyers are also being urged to dig into the history of a property in order to avoid any morbid surprises after sealing the deal.

There have been cases in Australia where a person has purchased a home only to later find out their dream house was once the site of a violent murder – kind of takes the magic out of homeownership right?

These types of homes are known as ‘stigmatised properties’, this refers to a house or other dwelling that has a negative history that may influence a person’s decision to buy the property.

This could be a violent event that may have occurred there, a notorious former resident or other similar factors.

Real estate agents do have some requirements to disclose if a history has a dark past, but it differs between states. Picture: NCA NewsWire/David Swift