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Legislative Assembly for the ACT: 2003 Week 9 Hansard (28 August) . . Page.. 3377 ..

MS TUCKER (continuing):

The costs are one problem with gazumping. Another is the disappointment of having your new home snatched out from under you. In some cases, there is no option given to the original buyer to increase their bid.

The previous government had done some work on developing a way to prevent gazumping. It is a problem that has exercised many minds around the country. The approach taken in this bill is novel. It is not a direct attack on gazumping; rather, it is an attempt to change one of the conditions thought to allow gazumping-the time between the verbal contract and the exchange of contracts.

The measures add some new requirements which can be seen as consumer protection and some new options to speed up the process. I do have some concerns about the effects. The government has been proud of its consultation and certainly has strong support from the chair of the property law committee of the Law Society. However, I am aware that a number of other property lawyers are concerned about the changes.

Tim O'Dwyer, a property lawyer in Queensland who has campaigned for certain consumer protection measures, recommended in an article in the Canberra Times this year that full disclosure be taken up in the Canberra market. Because there are questions remaining and because this is a substantial change to the system, I hope that we will see this act reviewed after its first year of operation.

I will briefly outline some of my concerns. The bill makes it compulsory for a seller, before advertising a place, to have prepared and available for inspection a contract; a building report, with some exceptions; a pest inspection report, with some exceptions; and the EER, which is already required. That also applies to an agent acting on behalf of a seller. The idea is to remove the necessity for delays due to getting to know the property.

The consumer protection argument is that this is full disclosure and there cannot be any hidden surprises. The inspector's contract and the selection of the inspector rests with the hopeful seller, not the buyer, yet it is the buyer who is relying on the inspector's thoroughness, suspicions and interests and who will eventually cover the costs of inspection.

A protection is built in that explicitly states that a property inspector can be held liable by the eventual buyer if there is anything in the report that is misleading or knowingly false or if the work is not completed with due skill and care. That is an attempt to overcome the obvious problem of the fox commissioning the report on the security of the chicken coop. But will it be successful?

Bringing an action against a person for compensation because of negligence is a large undertaking. It will cost you in terms of time, money and energy. You may win eventually, but what happens until then? There are Australian standards for inspectors, but they are not compulsory; they are guidelines. I expect that it would be a protection for inspectors to say that they had followed the standards; but, as far as I am aware-I have asked a reputable inspector-there is no professional body for inspectors, nor any registration system from which there can be a threat of expulsion for sloppy work.

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