Page 1467 - Week 04 - Thursday, 26 March 2009
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by holding up the implied warranty sections of the bill, we would be able to adopt changes to the implied warranty sections which meet the needs of the whole community. That is a noble aim, and it is an aim which the Greens share. But it touches upon the nub of the problem—we have to look at the interests of future buyers and tenants as well as existing unit owners and property developers. Just because they are not organised in effective lobby groups does not mean that the interests of tenants and future buyers should be ignored.
The consumer protection focus of the government’s bill is admirable in some ways, and it reflects a trend that is occurring in other jurisdictions. One outstanding concern is that these amendments may go too far in the direction of changing the potential liability from the buyer, where it is today, to the seller, where it will be next week. This is something that we will keep an eye on.
The minister’s statement, I trust, will reassure many people who feared that they would suffer damages or rescission of their contracts because they failed to disclose something of which they had no awareness and which they could not reasonably be expected to have knowledge of. This does not seem to be the case, but as with many other provisions of this act, we will have to keep a close eye on how ACAT or the courts interpret these laws in practice and be ready to move swiftly if it becomes apparent that injustices are occurring as a result of it.
It is only equitable that people should not be able to lie about the condition of a unit, thing or product they are selling. Many neo-liberal or free market ideologues fail to appreciate the extent to which capitalism relies on honesty and good faith to function effectively and the extent to which dishonesty and the practice of buyer beware can create additional transaction costs which are totally unproductive and a waste of resources.
Transaction costs are minimised if fewer checks need to be made to ensure that the product that one is buying matches its description and is fit for the purpose. In the trades practice world these types of consumer protections have already been made. We have discovered that buyer beware is only part of the equation. We are basically asking why something along those lines should not happen in the real estate industry, in particular as part of the Trade Practices Act. If you buy a unit and then discover it has got concrete cancer and you have lost your investment and your life savings are now worthless, you will be upset, and it is possible now that you may have some legal remedy.
Why should real property escape the consumer protection provisions that apply to chattels and services? We do not think that necessarily should be the case. Whether these new laws have the right balance between protecting the interests of the buyer and the seller, I am not sure. I think that probably the middle ground position may be found in practice, but we will have to see how the laws operate in practice.
Like Mrs Dunne, I have heard the concerns of the professional owners corporation managers, and I am very sympathetic to their concerns about the additional resources and expenses that they foresee the government’s amendments generating. These costs will, of course, be passed on to unit owners. The government has reduced the amount
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