There has always been a market in assets bought and sold "as-is, where-is".
Until the earthquakes it was generally confined to things like cars. The understanding in the market is that the seller makes no undertakings about the asset and the buyer takes all the risk.
Since the earthquakes a brisk market has emerged in unrepaired and uninsurable houses sold that way.
The fact that there is a brisk market indicates that there are plenty of willing buyers and sellers ready voluntarily to take a risk on what they are buying.
In normal circumstances, so long as all involved are aware of what they are doing and all relevant information is available, it would be better to let them get on with it.
Problems, however, are coming to light that the market is not adequately dealing with.
Fortunately, the Government is aware of them and is looking to take action. The problems have emerged as a hot topic in the media, at workshops run by the Canterbury Earthquake Recovery Authority and at a recent public forum on the rebuild and recovery.
At one public meeting, Earthquake Recovery Minister Gerry Brownlee acknowledged them and said that Cera was working with the Ministry of Business Innovation and Employment to try to find solutions for them.
One real concern at present is about houses bought as-is to be used as rental properties but left unrepaired and allowed to deteriorate, to the detriment of the neighbourhood.
Not a lot can be done about that, although if the properties are so bad as to be a safety hazard to tenants the council should be able to step in.
Anyone buying a house in and around Canterbury, no matter what conditions it is being sold under, knows that thorough checks are not only desirable, they are essential.
Building reports, engineers' reports, geotech reports are the new normal for all buildings. Those steps may be enough to deal with dangers for anyone buying now, although even with them there is potential for a seller to conceal the extent of damage for which claims have been made and paid out but which have not been repaired.
More problematic is the very real possibility that in future the record of damage to as-is properties will become lost as time passes and later buyers will be in danger of being misled, either inadvertently or otherwise, about the true history of the properties they are acquiring.
While the rule in such situations should still be buyer beware, and future buyers may in theory be able to protect themselves from being misled, there is a danger that buyers may not have access to all the insurance and repair information they need to be able to make informed decisions.
The last thing anyone needs is more bureaucracy in the business of buying and selling property.
But one solution that has already been raised and is probably worth examining further is requiring earthquake claim and repair data to be part of the land information memorandum - the LIM - held by councils for all properties.
Certainly some such mechanism may be necessary to ensure the high quality of the region's housing stock in the future.
- © Fairfax NZ News
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