False Advertising by real estate agents

Damo said :

And yes, contractually normally the apartment floor space can vary by up to 10% without any penalty

I think the safe money would be betting that it doesnt vary upwards by 10% very often

This really sucks, and I’d be ballistic! Mind you I’d never but a new property – but I realise this doesn’t help you with your dilemma.

To the OP: I have recently bought a property (not a new one as regular readers would know from my continual gripes about new properties), and we had a brilliant solicitor who specialises in the area of property law. He was amazing, and I challenge someone to find anyone better. The advice you’d get from him would be down to earth and your final answer. I suspect his first question will be “what’s it say in the contract”.

I’m not going to post his details on here, and I don’t want to go soliciting (pun intended) the company without permission – but email the Overlords and I’m happy to get the details to you via them.

For now, I;d also check that cracks are not appearing in the exterior walls as well!
(http://the-riotact.com/?p=8073#comment-136431)

maculicauda said :

Sometimes they include parking spaces in the total living space…

never ever saw that in my 3 years working the job.

All measurements are taken from the centreline of the common walls, so that will take into account some of your “lost” space.

And yes, contractually normally the apartment floor space can vary by up to 10% without any penalty

And as for the agent “false advertising”? cmon! …. As an agent youa re given the plans and specification from the developer, under good faith, you cant expect an agent to go and measure up the sizes in a construction site. ffs!

Sorry Roma et al: I am an experienced developer so best you keep your uninformed opinions to yourself.

The contract for sale will refer to the UTP size which will have been certified then approved by ACTPLA. Any variance is unacceptable and a civil claim, initially with all parties to the construction listed is the best way to start. See a better lawyer.

LOL. My uninformed opinion? I wasnt stating anything as ‘fact’ except that my maths could have been wrong. Im pretty sure I said that the variance ‘could well be’ accounted for by wall cavities/car spaces etc. Im no expert, but hey! Guess what? I never claimed to be! I cant begin to fathom that someone would take any comments on a forum as gospel and make significant legal and financial decisions on the basis of those comments. So, if you dont mind, I will comment whenever I feel like it, thank you very much.

Have a BRILLIANT day!

My maths may be completely wrong but we arent even talking about a full 10% variance here. We are talking about 7% variance, which could well be accounted for by the wall cavities and any parking spaces. To suggest that ‘aa’ sue is obscene.

I tend to agree with maculicauda, the unit size would include parking space(s). Go and measure those and you’ll probably find added to the size of your unit, a total of 138m2.

Sue. Seek $50K in damages, settle for $30K. You have a reasonable expectation that a 10% variance (if it’s in the contract) would be an exception rather than a rule for every measurement in the apartment. Have you confirmed that others in the complex have the same problem? Threaten to mount a class action (assuming you can find six other people who have a grudge against the same agent).

I have to say, the house I live in has a bathroom, a kitchen / dining room, a toilet, a laundry, 3 bedrooms and a living room. Buggered if I know what the size of it is, we bought because we liked the house and the location. (although in hindsight, we should have bought one with at least 4 bedrooms, so the study isn’t in the dining room or when the boys are older, they aren’t crammed into the same room)

Good point JC, also check whether the measurements included the overall room size in rooms like a kitchen where cabinetry etc will eat into your ‘real’ space.

I think you will find that the real estate agent was also going off the stated dimensions in the plan. At some point a surveyor signed off on the 138m2 plans as built to get a certificate of occupancy which is where the real culpability lies. If there was any false advertising I wouldn’t be surprised to find that it was done in ignorance on that basis. I’m not excusing it but you should have had your laywer check before signing anything.

Perhaps more importantly, would you have bought the place anyway? I dont think i’ve ever met anyone where the principle decision making point was the cost per m2 over other factors such as location, quality of fitout, amenity, aspect, or something else first. My place is supposedly 122m2 but in reality i couldn’t care. I saw what I was getting, and still bought it.

RiotReader said :

Have the measurements that come to 128m included the area of the internal walls?

That is a very good point. Most overall dimensions given on plans are ‘under the eves’ which includes space taken up by internal walls. It doesn’t take much to eat up 10m2, about 40m of internal walls. Sounds a lot, but it isn’t. Most plans show room measurements between the walls, so of course if you jsut meassure the internal dimensions of a room it will appear less.

Is it a bird… is it a plane….

Nice work Jonathan Reynolds much better than my recipe for self mutilation.

I remember Alan Kerlin (GCC) bringing up comments about these building variance allowances at a recent meeting (it will be on video, just don’t have the time to trawl back through them).

IMHO (and I am not a lawyer) there is a difference between the builder constructing premises and being given some leeway to allow for these variances and a specific contract that is entered into for premises to be “delivered” of a particular nominated size.

You’ll need to read the fine print of your purchase contract, but unless there is specifically a clause that allows for “reasonable” variation, you may have a valid case if what you have taken delivery of is substantially different, or not as contractually stipulated and agreed.

If you are genuinely concerned about the issue then you should have no problems paying for a second legal opinion. Ring the ACT Law Society and ask them to give you a list of legal practices that specialise in this area of the law.

Wow I would be well and truly p*ssed at that. 10% leeway what a crock of donkey nuts smothered in roasted badger vomit. “Oh yeah madam your doors won’t close because we shaved 10% off the openings and this wall here so we can save more money and rip you off just that little more.” Hahahahahaha Seriously a 30m room can be only 27m and not screw up the entire plan? I’m not a builder but that seems like a huge difference.

And in monetary terms that $30,000 of space you’re paying for but don’t have is costing you around $2100 p.a at at rough 7% interest rate. If you got that money back and put it straight back onto your mortgage you’d be paying off that $30,000 about 14 years faster, roughly in my head if we ignore include compounding. Time to buy more bank shares….

Uh oh! Mummy please don’t drink today… drink today…. drink today

I find it astounding that ANY variation is permitted between plan and as built. As Special G notes, Planning are right on top of these discrepencies, and if variations do take place, should be brought to the attention of the (off the plan) owner.

I could see how the whole size is fudged by including the garage/parking/storage area, but these should be listed separately.

That said, I still have a niggling feeling that an apartment block on Northbourne has a floor more than planned.

Planning spit the dummy about the 20cm my garage was going to take up and made me change the plans to suit. Then a surveyor had to tick off on the placement and final.

About right is not good enough in the building game.

A 10% allowable variance sounds very suspicious in an era where most large-scale construction is based on CAD plans that are accurate to 1 or 2 mm, but probably not surprising, as i would expect the construction company/sellers to slant everything in their favour. It also sounds very curious that measurements were off by a constant 20cm in each room- if it was just crappy construction, I’d expect it to be out by varying amounts. Possibly the builders were told at the last minute that they needed to include another fire escape/lift/whatever, so decided to shave a bit off everyone’s apartment. 10sq m is the equivalent of a small bedroom, so it’s more than a minor reduction. Are other apartments on the same floor similarly affected?

You might be stuffed legally if the 10% is in the contract, but the rest of the world needs to know who this dodgy builder is. If you can’t get any satisfaction out of Consumer Affairs or ombudsman etc, try the media.

Have the measurements that come to 128m included the area of the internal walls?

This is just complete bullshit. In this day and age when I search for Oil in the middle of the Ocean I know exactly where I am down to an accuracy of less then 5cm. For these people to say they can only measure the dimensions of a unit to +- 10% is pathetic and they should be taken to court and sued. I would fight non stop for your money back or the relevant 10% you have overpaid.

“After speaking to my lawyer, he stated they can be 10% off and I can’t do a thing about it.”
Maybe you can be off on the amount you pay them, up to 10% as well? :-S

Conversely buying from plan (in the right market) can give you a nice head start on getting some equity maaaaaaaaaaate.

The missus and I bought a house off the plan in 2003 and 6-7 months later we were up by about $30K once the house was completed.

Use your imagination and profit off those who don’t have one. Sorry, that’s a bit harsh, but it is surprising how many people cannot read/visualise plans. So, I wouldn’t rule out buying off the plan altogether.

Like pretty much anything else, buyer beware.

Aurelius said :

You took the word of an estate agent?
There’s your first mistake.
Estate agents are cheating lying pieces of scum.
And that’s just the nice ones.

you seem to be well versed in all manner of bad experiences, don’t you?

Buying “off the plan” has many risks associated with it, the plan may change to allow for unforseen obstacles during construction.

I have never had a bad dealing with real estate agents, I have had many rental properties over the years and have always found the real estate agents to be my friends from a renter’s perspective. I have a couple of friends that are dealer principals and have family members who work in the industry.

All of my discussions re new houses and off the plan purchases have been met with warnings and attempts to dissuade me from this track, the general consensus is that purchasing a completed house will ensure that you get what you see, not what was on a plan that may change without notice.

This won’t help the OP, but I suggest that they speak to the Real Estate Institute, as they may have some ideas or assistance for you, to enable you to come to a resolution with the agent.

It is worth a try, additionally, get a second opinion from another solicitor. there may be another avenue, and the second eye over the contract might pick it up.

I’d be trying to see the building plans. The ones they used to make it sans the 10%.
Why would they shave 10% off. it would have been planned to be a fixed size, if its 10% smaller it will change alot of things about the plan.

Thing is are they trying to rip u off by showing you a plan thats just 10% bigger?

djk, the second part is perfectly rational – you pay good money to a lawyer so that they protect your interests and advise you about what you are getting into. If the lawyer did not explain about about the 10% and/or did not counsel strongly against accepting such a condition then they should be sacked.

jimbocool said :

Having bought a place off the plan myself some time ago, the advice I got from my lawyer was, ‘forget what the agent says, forget what the display aprtment looks like, the only thing that matters is what is in the contract’. So the thing to do is check the contract and if it does indeed allow a 10% variance then you should sack your lawyer! The reduced size of the apartment should entitle you to reduced body corporate fees and lower rates though…

1st part is correct, the contract is the important thing to check. The 2nd part seems a bit irrational, given that the OP is the one who entered into the contract, after presumably having all of the conditions explained to him/her.

It is standard for off-the-plan units to have a condition to this effect, and the response if you had asked for it to be removed would have been take it as is or leave it.

When reading an apartment plan, are the dimensions of the apartment measured off the supporting wall, or the internal gyprock wall? That could account for some measuring discrepancies.

I remember when building our house back in the day we were having a dispute with our builder over a wall placement, as it didn’t quite match the plan. When I raised this with the builder his response was “oh don’t refer to the plan, that’s just a guide”.

Not quite the reply I was expecting, haha!

I’d push this further. 10% is pretty big. Today Tonight is your answer. Sic Tracy and Helen Wellings onto them. They won’t care whether it’s in the contracts or not if it’s unfair to battlers. Be prepared to get on the telly in battler mode. Make sure you know the big bucks behind the complex – with any luck, there will be a high-profile company who won’t want their practices exposed. Do a letterbox drop to everyone in the complex. Get the government onto it BEFORE THE ELECTION!

They’d no doubt have a clause in the contract to cover themselves, as it’s difficult to build a property to exact measurements, especially with an off the plan sale. I agree, estate agents can be real snake oil salesmen, that’s why you get a solicitor. I’d suggest asking your solicitor why they can be 10% smaller than you paid for, if they really did read the contract and really know the laws then you’ll get your answer. (If they didn’t and don’t then don’t use them again)

Having bought a place off the plan myself some time ago, the advice I got from my lawyer was, ‘forget what the agent says, forget what the display aprtment looks like, the only thing that matters is what is in the contract’. So the thing to do is check the contract and if it does indeed allow a 10% variance then you should sack your lawyer! The reduced size of the apartment should entitle you to reduced body corporate fees and lower rates though…

Might be worth checking the relevant legislation about the 10% rule. Generally there is some leeway, but 10% seems an awful lot when you’re talking about property.

I will apologise in advance for the snide comments you’re going to cop here – I feel your pain, and if you’re paying good money for something you should be getting exactly what you signed up for.

the word of an estate agent; against the word of a lawyer… ha ha ha ha …gold!

anyway, whether or not you have a legal leg to stand on, it’d be fun to walk in to agent’s office with a besuited mate [lawyer disguise] and a chap with a camera and film the agent as you present your findings and intention to sue for damages and get hir squirming on tape. mebbe sell it as an audition to TDT or some other gutter press show?

Sometimes they include parking spaces in the total living space…

You took the word of an estate agent?
There’s your first mistake.
Estate agents are cheating lying pieces of scum.
And that’s just the nice ones.

Oh, it’s soooo hard to get good help nowadays . . .

“After speaking to my lawyer, he stated they can be 10% off and I can’t do a thing about it.”

if that’s the case, then haven’t you answered your own questions?

and it’s equally as likely that your neighbour has a 148m^2 joint.

6 extra apartments sounds extreme for something that less than 10% smaller than required (in one dimension). not knowing the complex, i’d suggest that it’s unlikely they’re going to fit six extra places into the same complex.

shrug.