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How to sell and buy a flood-affected property

By Tim O'Dwyer - posted Thursday, 20 January 2011


Most of us believe that nurses are very trustworthy - as surveys regularly show.

I first really trusted and appreciated nurses during the big cleanup after Queensland’s 1974 Australia Day floods - 37 years ago this month [January 2011]. I had been helping friends whose highset home in the Brisbane suburb of Graceville went completely underwater. On the way home with mud-splattered brooms and shovels sticking out of my VW’s passenger window I stopped at traffic lights. Suddenly a volunteer nurse appeared and gave me a protective tetanus shot.

Just a few years ago a very trusting nurse (a family friend) arrived from interstate, promptly went house-hunting and visited a Graceville real estate agency. This mature-aged lady soon discovered why agents are at the bottom of the trustworthy surveys.

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The saleslady told her first lie when Nurse Betty, as I’ll call her, noticed that the newly renovated highset house she liked adjoined a park and creek. “Any flooding here?” she asked. “Not a problem,” replied the saleslady.

The creek happened to be notoriously flood-prone Oxley Creek, named after John Oxley who first recorded evidence of massive floods when he explored the Brisbane River in 1824.

After Nurse Betty’s eager offer was accepted, my wife and I joined her to revisit the house. We asked a neighbour about flooding. In 1974, said the neighbour, the water went over his roof-guttering. He always worried in heavy rains, he added, when the creek sometimes overflowed into his backyard.

Nurse Betty’s flood search later revealed that more than five metres of water covered the land in 1974. Allowing for the Wivenhoe Dam, the Council estimated a Q100 flood (bigger than ’74) would still put this block more than two metres underwater.

The saleslady told her second lie when she assured her believing buyer that the renovations and the relocation of the house to this land had passed all Council inspections. Nurse Betty’s building records search would show otherwise. The Council had no record of any inspections.

Needless to say the Queensland Law Society/Real Estate Institute of Queensland contract used by the agency contained no clause about past flooding and gave no redress for the outstanding inspections.

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Suffering a little buyer’s remorse by now, Nurse Betty sought an independent valuation. Yes, she had signed the pre-contract Warning Statement recommending legal advice and a valuation. No, she did not do either before signing the agent's contract. She was like most home-buyers who trust the seller's agent and ignore this overly-wordy and poorly-designed government form.

The valuation came in below the contract price because of the block’s flood history and high-tension power lines in the park. Nurses are usually pretty observant, but Nurse Betty had not spotted these.

The sales lady told her third lie (a variation on the first) to the valuer when she volunteered that the block had been filled above the flood level. Hardly. According to the valuer’s report the Council would have required the floor of the house to be 300mm above the Q100 flood level, which was 2.6 metres above the fill level.

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About the Author

Tim ODwyer is a Queensland Solicitor. See Tims real estate writings at: www.australianrealestateblog.com.au.

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