Bought Property with Slab Heave, What Are My Options ?

We bought this 6 years old home last year (May 2016) as out first home.
We hired a Building inspector of a well-known franchise to do Pre-purchase inspection, and got report which said only minor defects found (few cracks above cornice, few cracked roof tiles, few cracks here and there, etc.)

We don't have an internal access to Garage, so few weeks back i got a tradie to check its possibility.
While looking around he spotted cracks above cornice in few different places and a squeezed brick expansion joint from outside.
He recommended me to get a building inspector in as he afraid, it could be slab heave, so I called my home insurance to send one.

Below part will sound bit unbelievable.
I was googling what slab heave is, came across an image which looked like my kitchen area. It was of a thread from Homeone forum and was posted in 2014.
They were discussing about slab heave issues in Melbourne's west etc. The person who had posted that image was an independent Building inspector.
I contacted that guy and asked him is it street X from suburb Y, he replied me yes with street number 14 (my property).
It turned out previous owners got him to inspect the property in 2014, after finding cracks above cornice on several places.
His finding was slab was dished (middle part sank) causing such cracks.
I consulted him again and he gave me report from 2014 as well.

Previous owners somehow hid those cracks and sold it to me.
I bought this property, because I was given the report by building inspector of a well-known franchise saying no major defects found.
We had a clause in our contract, which could make contract void if major defects found.

To make it clear, I will post details with Timeline

Dec 2010 House got an occupancy permit.

Jan 2011 given on rent as it was an investment property.

May 2014 major cracks were found above cornice, they consulted an independent building inspector.

Mar 2016 House was put out in market for sale.

May 2016 we bought the property after getting a green signal from our building inspector.

Jul 2017 we were told about possible slab movement by a tradie and were asked to involve someone professional.

Aug 2017 I got that independent Building inspector in do condition report again.
I have also contacted the builder, as it would be under warranty, they are sending someone next week.

**What other options I should consider? Please share your advice? Thanks.**

Update 1: Gave out all details to leading law firm and took phone appointment, Lawyer will give me call tomorrow to discuss it further.
Update 2: Today builder's guy came, he blamed everything on landscaping done by previous owners. Waiting to hear from the insurer of my building inspector.
Got lawyer's phone appointment postponed tomorrow. Want to discuss does case has any merit? whether I should go ahead or repair, sell & leave.

Update 3: Spoke to Lawyers, they are recommending me few engineering and plumbing tests, so they can understand the case and recommend me, whether we should go ahead or not? Total cost including their fees would be around $7000. Don't want to jump right away with these guys though. Made an appointment with one more lawyer next week. Meanwhile waiting for documents(Building plans, Soil test & engineering) from the council.
The Builder has done some work in 2014 after those major cracks, I asked the builder copy of the report on that.
They refused on privacy grounds as I am not the first owner of that house and those document might have their name written on it.
Thinking to register a complaint on DBDRV soon, as they do send building inspector for free to get the second opinion.

Comments

  • +6 votes

    Building Warranty is the likely best option.

    The house seller is under no obligation to reveal any such information. You may be able to sue the building inspector you hired, but the terms and conditions you would signed would have enough idemnity clauses to make that unviable. Still, go back over your contract with the building inspector and see if that is an avenue - especially since you have a report from 2014 showing that the issue existed at the time of your purchase.

    • +20 votes

      It can be fraud if the seller actively conceals major defects (see for example Anderson v Daniels), which is at least what OP seems to believe happened.

      Building inspector (and more importantly their insurance company) will fight any claim, but doesn't mean you can't/shouldn't try that front as well.

      I would speak to a solicitor ASAP.

    •  

      I forgot to put up above, on Friday i called my building inspector's franchise to follow up, I was told they forwarded both reports to their insurer.
      I will know about outcome tomorrow or on Tuesday.

      • +8 votes

        Not sure giving them the evidence you will be seeking to rely on was a great idea…

        • +2 votes

          Well till now, i was relying on that independent building inspector's advice(who gave me 2014 report).
          I asked him, should i give them these reports? He said yes, so i sent them.

        • +12 votes

          if you are going to take civil action then they will have access to the reports any way.

        • +3 votes

          @altomic: They will get it at some stage regardless, but this allows them to see what they are up against from the start.

    •  

      I bet the contract will say something like "… To the best of my knowledge…" Which would seem like he didn't know it was there.

      • +4 votes

        You can't contract out of negligence

        •  

          You can't contract out of negligence

          negligence implies that the vendor were required by law to disclose this to the buyer. are vendors in vic required to do that?

        •  

          @whooah1979: i thought supasaiyan was referring to contract with building inspector not vendor thus my reply. Apologies if supasaiyan is referring to contract of sale.

      • +1 vote

        Will be very interested to hear what the lawyers have to say on this one. A building or pest inspection is limited to what is visually apparent, as the inspector is not usually authorised to damage the property to ensure nothing has been hidden. So if the previous owner covered over the issue, the building inspector would have no visual clues as to the underlying problem. It sounds like it was only due to the continued deformation of the slab that the subsequent builder noticed new cracks forming.

        •  

          Yes, this is exactly how I understand things as well.
          If you read the "fine print" of a building inspection, they have so many "get out" clauses, that they are barely worth the paper they are written on.

          There is no shortage of cases of people hiding defects in houses. In my experience, when I have tried to pursue these matters, it has always come down to "buyer beware".

          However, in this case, you have very valuable evidence - the prior building report - and this may tip the scales enough.

          In any case, even if you take the prior owners to court and win, you will almost certainly never see a cent of it. The laws in Australia allow people to slip and slide and evade their responsibilities - money in wife's name, move interstate, claim financial hardship, lack of sleep, etc. The law is a complete joke. And you may end up with a mountain of legal fees with nothing to show for it.

          Anyway, good luck to you and please keep us posted on how you go.

        • +1 vote

          @Moose-au:

          That's very depressing.

        • +1 vote

          @Moose-au:

          The laws in Australia allow people to slip and slide and evade their responsibilities

          Do you have experience with this?
          I'm pretty sure that you can always enforce a court order unless the other party is completely bankrupt or homeless or something.

          If they try everything to avoid paying, it might end up being a tiring process, but you can be sure it will be more painful for the other side than it is for you.

          A sheriff can size their income, suspend their drivers licence and car rego and things like that.
          That'll make pretty much everyone that has a job struggle.

          So that:

          you will almost certainly never see a cent of it

          Is definitely not true.

  • +4 votes

    You may have legal recourse against the building inspector and his/her insurance depending on what exactly you engaged him/her to inspect etc.

    I would start discussions with a lawyer. Maybe start with Slater & Gordon as they ran a class action on this not so long ago so they know what to do

    https://www.slatergordon.com.au/media-centre/media-releases/...

    http://www.smh.com.au/business/slater--gordon-calls-for-task...

    • +2 votes

      Heard of them in few news articles related to slab issues.
      I will contact them.

      I forgot to put up, on Friday i called my building inspectors franchise to follow up, I was told they forwarded both reports to their insurer.
      looks like i need legal advice ASAP.

  • +37 votes

    I am a building consultant and work in this area of disputes. I'll give you some free advice. The building is under 10 years old. From what you have reported regarding slab heave, it appears there is a structural defect which makes the builder and/or his geotechnical engineer responsible. You can lodge a complaint with the newly formed Domestic Building Dispute Resolution Victoria and they will send an assessor out there to investigate and do a report for free. They will involve the builder as a party to the dispute. It's all free!

    • +3 votes

      What happens when the builder goes broke as they often do to avoid future liabilities such as this?

      • +1 vote

        Not in my case…the builder is one of the big builders.

      • +3 votes

        Exactly, builders sometimes start a new company every few years under a similar name to ensure liability does not linger, especially when a business changes hands. You don't need to "go broke", simply wind up the business and rebirth. I've personally known the owner of a construction company in NSW that did this with a slightly different name so that the public would not notice, however it was over 10 years ago so maybe legislation has caught up with this dodgy practice?

        •  

          Yes, ATO is pushing hard against these practices, since about 2-3 years ago, as they often involve evading taxes or even salaries.

          The term for this is phoenix companies.

    •  

      thanks for your advice. Builder's guy is coming tomorrow, I will show him report from 2014. If the response is not positive will lodge complain to DBDRV.
      I am also thinking to get some legal advice as well.

  • +8 votes

    Start proceedings to claim home builders warranty insurance against the builder as soon as possible. If I remember correctly it only lasts for 7 years. So by initiating a claim now you get around that even if it eventually takes years to resolve.

  • +5 votes

    Keep us updated please. I will be following as an interested observer.

  • +2 votes

    Funny how the 2 ads in this thread im looking at now are for house and land packages in melb….. ill pass.

  •  

    Is the builder Metricon?

  • +2 votes

    This will cost you a bundle in professional and legal fees and you will get nowhere fast as is always the case. Or it may take years to reach a conclusion.
    The original builder will engage thier own building inspector who will argue the cracks are superfical.
    The Court will decide that you dont have sufficient evidence or that there is reasonable doubt and you end up with a huge legal bill and non better off.
    If you have any reservations patch up all the cracks and SELL THE HOUSE!
    Surely you will now get more than you paid for it.

    • +3 votes

      If next owner finds out, wouldn't i be in trouble?

      • +1 vote

        If next owner finds out, wouldn't i be in trouble?

        Get your conveyancer to put in some jargon/clauses about the purchaser relying on their own reports/investigations. If the shit hits the fan, blame the conveyancer and let his insurance deal with it.

        Surely you will now get more than you paid for it.

        Maybe not, after you factor in agents fees, stamp duty, etc … but I'd rather get out, then try to litigate.

    • +2 votes

      The Court will decide that you dont have sufficient evidence

      He has absolutely clear evidence that the previous owner knowingly sold him a defective property but tried to cover up that fact.
      Why do you think courts are that unreasonable?

      I would guess that this is actually close to fraud and could potentially even lead to criminal investigations.

      The only issue I see is whether it will be seller or builder who ends up with the bill, but that shouldn't be too relevant for op.

  • +23 votes

    Can I just say that this is just super, super scummy. It's bloody depressing to hear about so many dodgy people passing the god damn buck.

    Why is it that you can work as a 'building inspector' and I use that term very loosely, and inspect a house and then miss god knows what and then not only does the arsehole get paid but gets away without incident, whilst the poor bugger who buys the house gets stuck? It's just complete BS. Beyond BS. I don't know why we tolerate this sort of rubbish in this country. It's not like building is even cheap here.

    If you're going to run a business that inspects buildings for structural defects then you should either be completely liable for anything you miss and or have insurance that covers you if you do.

    Sorry for the rant, but it's so frustrating when shitty people get to skate away.

    FWIW, my 'building inspector' who was a member of a building inspecting society, came recommended with many good reviews missed; cracked rafters, leaking shower/bathroom, retaining wall problems, lack of half of ceiling being insulated, cracked tiles.. Absolutely useless.

    OP best of luck. I really hope you can get some joy from this. I just wish you didn't have to deal with this shit.

    • +7 votes

      I recently bought an established home and completely agree. Building inspectors are fricking worthless.
      Mine missed a leaking tap that was draining into a wall cavity, the fact none of the gutters and downpipes were serviceable, broken exhaust fan, broken oven, hot water system was illegal, there's a faulty earth somewhere in the house which flags the rcd, retic faulty, among many other things.
      He came recommended to me, also.
      I paid extra for the full inspection. Which should have picked up everything I just described.
      Thieving, useless piece of shit.

      •  

        "Mine missed a leaking tap that was draining into a wall cavity"

        How would they have seen that during an inspection?

        •  

          There probably would have been tell-tail stains on the wall or water dripping under the house.

        •  

          All the plaster falling from the wall and the fact you could push it in with your finger probably should have raised some flags, I reckon.
          I found it and I wasn't even looking for it. So go figure.

        •  

          @imnotarobot:

          Oh fair enough then. I thought the complaint was about a hidden problem.

    •  

      I don't know why we tolerate this sort of rubbish in this country

      Not sure where your house is, but in Sydney/Melbourne is all comes back to property prices. Construction is cheap compared to land values. People rarely care what comes back in the building report. If you pass on a property due to a defect, someone else will come along and pay more for it. Often it's just required for a mortgage, so people get it done, but they don't really want to hear about the defects.

      In fact, if you happen to be in a 'heritage' suburb and your house has a demolition worthy defect, it's like winning the lottery, because you can put up a mc-mansion, which wouldn't have been allowed otherwise.

    •  

      Its been ~10 years since I had to use a building inspector, but over here in WA the service was always described to me as "checking for structural integrity of the building only".

      i.e. leaking taps and gutters that don't work are not structural items (the building isn't about to fall down while you are sleeping) and so would not be part of any report. Gas and electrical items like ovens not working or RCD's tripping also arent structural and would need a licensed electrician/plumber to investigate.

      It sounds like some people have paid for the above extra things as part of the inspection which might change the situation and have these things included, but I haven't used a service like that.

  •  

    Building inspections have so many indemnity clauses they aren't suable. They're basically useless, except as a negotiating tool to get another few k off the price, or as an exit avenue in case you change your mind (exercising cooling off will cost 0.25%).

  •  

    Can you share the builder name and suburb?

  •  

    OP - Have you called anyone to quote on the remedial work? You should try to line up some quotes ASAP.

    Litigation and insurance claims could take months/years.

    If you can get some remedial work done for a X and it gives the house another Y years (where X & Y are some numbers to justify the spend), then it might be money well spent, instead of litigating…

    •  

      no, not yet, what kind of people I should be getting to do this work as it is a possible slab defect?

      •  

        google 'slab heave repair'.

        Most of the people who do this type of repair are calling themselves 'engineers'

  •  

    How about resin injection (http://www.urathanesolutions.com.au) to lift/underpin the slab?

  •  

    Sorry, couldn't help but say… Bikies

  •  

    So is your house in the west or this could occur at any places where the downpipes are left open for 8 odd months ?… any building inspector or knowledgable person can advise what the issues can be in future as for now I dont see any squeezed AJ or Articulation Joint, how should I know a slab heave have occurred and that i have minor cracks everywhere on the slab which building contractors and independent inspectors say is normal.

    •  

      I haven't seen open downpipes but could be possible, when the previous owner had this place.
      Conclusion on slab heave was reached by building inspector when he measured floor by Laser level, he found drop in middle part of house.

  •  

    A 4yo old house with serious build quality issues.
    Is there no chance of sueing the builder? He is probably the culprit here IMO.

    A friend had to sue their builder over a kithome slab, which had been positioned illegally.

    •  

      What was the outcome? was it during construction time?

      I am just afraid of legal bills and ending up nowhere.
      but I am getting a consultation with the lawyer tomorrow.

      • +1 vote

        See what the lawyer says what your options are.

        If you have a strong case that you know you will win, you have nothing to lose as the other side will end up paying your legal costs.

        Also, if the other side realises that they won't have a chance in court, they might try solving it without court to keep the costs at a minimum.
        If they have insurance, even more likely that they just let their insurance pay for it.

        That said, if you are able to solve this via VCAT, legal fees might be very little too (less than $100).

      •  

        I didn't find out sorry.
        We fell out one christmas when he got violent (Axe-man).

        The council rules were breached. The slab was too near to the next property because the fence was put in the wrong place, thus the builder (Kestral, wa) got the position wrong. The Council made them fix it.

        I think it was fixed without cost to the owner.

  •  

    Mind posting the name of the suburb? Coastal like Altona, creek/wetlands like Point Cook/Altona Meadows or ex pastoral like Derrimut/Trug/Tarneit?

  • +1 vote

    This is like the last time with the guy who bought the basement apartment with illegal ceiling height.
    Anyone know what happen to that one?

  • +2 votes

    Sorry to hear, hope it all works out

  •  

    This sounds like potentially Burnside Heights and probably around Tenterfield estate area. There's a large lake that extend the length of the estate and it does moves. My mates lives there and his house already seeing movement. The corners of wall and floor moves and many trims have open up gaps on wall side .

    I suspect the wall might have tilted a little, but that said, it is too early movement for a house that is less than 10 years old.

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