Can You Sue Previous Homeowner for Non Disclosure in Australia?

Can you sue previous homeowner for non disclosure if you ever see a problem with the house you recently purchased?

The short answer is yes, you can sue a previous homeowner for non-disclosure in Australia if they failed to disclose significant defects or issues with the property that were not included in the sale agreement. 

However, you must prove that the seller knew about these issues and intentionally withheld the information. 

Be aware that the specific legal requirements and likelihood of success can vary depending on the state in which the property is located.​

Under What Circumstances Can You Sue For Non-Disclosure?

You can sue a previous homeowner for non-disclosure if they failed to disclose any material defects or problems with the property you were unaware of when you purchased it. These are part of the essential information to ask before buying the house. This can include things like:

• Structural defects, such as cracks in the foundation or walls
• Water damage, such as leaks or mold
• Pest problems, such as termites or rodents
• Unpermitted work, such as an illegal addition or renovation

What Are The Elements Of A Non-Disclosure Claim?

A non-disclosure claim typically involves certain key elements that need to be established for the claim to be successful. These elements are:

1. Existence of a Duty to Disclose: The claimant must prove that there was a legal obligation for the other party to disclose certain information. This duty can arise from a contract (such as a non-disclosure agreement), a specific legal requirement, or under general principles of equity and fairness, particularly in fiduciary relationships.
2. Failure to Disclose: It must be demonstrated that the party with a duty to disclose failed. This involves showing that the party either withheld information that should have been disclosed or provided incomplete or misleading information.
3. Materiality of the Non-Disclosed Information: The information not disclosed must be material. This means it should be significant enough that its disclosure would have influenced the claimant’s decision-making. In other words, the undisclosed information must be substantial rather than just trivial.
4. Reliance on the Non-Disclosure: The claimant must show that they relied on the lack of information in making their decision. This element often involves proving that if the claimant had known the undisclosed information, they would have made a different decision.
5. Damages or Loss: The claimant must demonstrate that they suffered a loss or damage due to the non-disclosure. This could be financial loss, loss of opportunity, or other harm that can be directly attributed to the non-disclosure.
6. Causation: There must be a causal link between the non-disclosure and the harm suffered. This means showing that the loss or damage directly resulted from the failure to disclose the material information.
7. Good Faith and Honesty: In some contexts, particularly in fiduciary relationships or contracts involving a duty of good faith, the claimant may need to prove that the non-disclosure breached these duties.

Each case of non-disclosure is unique, and the specific elements required can vary based on the context of the non-disclosure, the nature of the relationship between the parties, and the applicable law. 

Also read: Pool Fence Regulations in QLD: A Complete Guide for Pool Owners

What Damages Can You Recover In A Non-Disclosure Claim?

The damages you can recover in a non-disclosure claim will depend on the specific facts of your case. However, they may include the following:

Direct damages:

• The cost of repairing the defect or problem: This includes the cost of labor, materials, and any other necessary expenses.
• The diminution of value of the property: This is the difference between the value of the property as it was represented to you and its actual value.
• Any other losses you have suffered due to the defect or problem: It could include the cost of temporary accommodation, loss of rental income, or the cost of selling the property at a loss.

Also read: An Overview of the New Minimum Standards For Rental Properties in Qld

Indirect damages:

• Emotional distress: This is the mental and emotional suffering that you have experienced as a result of the defect or problem. This could include anxiety, depression, or sleeplessness.
• Legal fees: You may be able to recover the cost of your legal fees if the previous homeowner acted recklessly or negligently.
• Expert witness fees: You can recover the cost of your expert witness fees if their testimony was necessary to prove your case.

Also read: What Laws Do Real Estate Agents Have to Abide by in Qld

It is important to note that you will not be able to recover speculative or remote damages. 

For example, you would not be able to recover damages for losing a business opportunity if you cannot prove that you would have had the chance but for the defect or problem.

Keeping detailed records of your losses is essential to maximise the damages you can recover. 

This includes receipts, invoices, and any other documentation that shows the cost of repairs, the loss of value of the property, and any other losses you have suffered. 

When gathering pieces of evidence, always seek an expert conveyancer’s help to ensure you have a solid case to file. 

What Are The Defenses To A Non-Disclosure Claim?

Several defenses can be raised in response to a non-disclosure claim. These defenses, if successful, can limit or completely negate the liability of the party accused of failing to disclose information. The most common defenses include:

1. Lack of Duty to Disclose: As a homeowner, you may not have had a duty to disclose a particular defect or problem to the buyer if you were not aware of it or if you believed it was not material. Material defects would have significantly affected the buyer’s purchase decision.
2. Disclosure: You can argue that you did disclose the defect or problem to the buyer, either verbally, in writing, or through a pre-purchase inspection report. You have fulfilled your disclosure obligation if you provided the buyer with sufficient information about the defect.
3. No Causation: Even if there was a defect, you can argue that the defect did not cause any actual damage to the buyer. The buyer may have exaggerated the severity of the defect or could have repaired it at a reasonable cost.
4. No Reliance: You can argue that the buyer did not rely on your representations about the property. The buyer may have had reasons for purchasing the property, such as its location, size, or price, and may not have been influenced by your statements about its condition.
5. Contributory Negligence: If the buyer failed to conduct a proper pre-purchase inspection or ignored apparent signs of a defect, they may be considered contributorily negligent. Their negligence can reduce the amount of damages they can recover.
6. Estoppel: If the buyer made representations about the property that were inconsistent with their claim or acted in a way that led you to believe they would not bring a claim, you may be able to argue estoppel. Estoppel prevents a party from asserting a claim they misled another party about.

It is important to note that the specific defenses available to you will depend on the particular facts of your case. 

Previous Homeowner Sued for Mold-Infested House 

Our client at Walker Pender sought our conveyancer’s help as she faced a challenging situation. She purchased a house under the assumption that it was free from mold, a crucial factor given her asthma condition. 

Unfortunately, she discovered the previous homeowner had deceitfully concealed mold infestations by covering them with wood panels. This concealment aggravated her asthma, leading to frequent and severe episodes. Our team gathered the appropriate evidence to demonstrate the seller’s intentional non-disclosure and the resultant health impact on our client. 

The judge ruled in favor of our client, acknowledging the seller’s fraudulent misrepresentation. Consequently, our client was awarded significant compensation, covering her medical expenses, property remediation costs, and additional damages for the distress caused. 

Can You Sue Previous Homeowner for Non Disclosure?

Can you take legal action against a previous homeowner for hiding crucial information? At Walker Pender, we specialize in property law and can guide you through the complexities of non-disclosure cases. If you’ve encountered hidden defects or misleading information in your property purchase, don’t hesitate. Reach out to us for expert legal advice and robust representation. We’re committed to ensuring your rights are protected, and you receive the justice you deserve. Contact Walker Pender today for a consultation.