Over the past decade or two, thousands of homeowners have been financially wiped out when they bought houses that were later revealed to be rotting from within. Others have seen their equity take a hit when P residues from dodgy tenants caused widespread alarm.
Now I’ve heard whispers of a new construction issue – asbestos.
Someone in the industry told me he was re-training as an asbestos inspector. Does he know something the rest of us don’t? It’s early days, but there is a precedent.
In 2015, the government of Australian Capital Territory (i.e. Canberra) released a list of 1,022 properties affected by asbestos contamination. The scale of the problem, and the risk of asbestos fibres floating free, meant piecemeal clean-ups weren’t feasible. So the ACT and Federal governments set up a $1 billion purchase and demolition scheme.
Swathes of houses were demolished. The empty sites were then re-stocked with brand new houses on smaller sections, and these were sold off to finance the cost of the scheme. If you were one of the unlucky homeowners, you were paid out by the authorities and required to vacate. Many family homes were destroyed, including some heritage buildings.
Just to be clear, I have no information that anything of this nature is brewing in New Zealand. However, a quick Google search will reveal all sorts of recent scandals involving fraudulent products that have entered the construction supply chain. Would you bet against the possibility of asbestos, or something equally dodgy, showing up?
So how can you protect yourself? First, get a reputable builder’s report on any property you’re looking to buy. Make sure the firm compiling the report has comprehensive Professional Indemnity insurance.
Ask the real estate agent if there are any known issues, and if in doubt, discuss things with your friendly lawyer.
As I’ve said before, your lawyer is there to protect you from yourself. Good legal advice may cost you money in the short term, but poor advice (or no advice) can have seriously adverse affects on your wealth.
Are you looking to get into the market this summer? Do you know someone who’s buying for the first time? Get in touch.