Residential claims case studies

Illegal building works

After moving into their new home, our client was issued with an order from the council to rectify several building defects and to obtain an occupation certificate.

A tradesman advised that several parts of the structure looked to be illegal. Further investigations led the council to issue our client with an order to rectify the defects.

First Title reviewed the purchase file – there was nothing to indicate illegal works were done to the property or that an occupation certificate had not been issued. A building surveyor, draftsman and several contractors were engaged to assist with the project.

First Title accepted the claim pursuant to its ‘illegal building works’ coverage. First Title paid costs associated with planning, rectification works and council fees required to obtain a final occupation certificate. Payment $100,000

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Boundary and survey problems

After our client purchased their dream home, they obtained a survey report for their property and discovered the neighbour's retaining wall and garden encroached onto their property.

The client approached the neighbour about the encroachment and provided a copy of the survey report. Shortly thereafter, the client received a reply from the neighbour’s solicitor attaching an adverse possession application. The neighbour had applied to become owner of 40 square metres of our client’s land.

First Title reviewed the purchase file – the encroachments were not disclosed by the vendor, nor was a pre-purchase survey obtained. The client and First Title decided the best course of action was not to dispute the claim by the neighbour for ownership of that portion of the property and First Title would compensate the client for the lost land.

First Title accepted the claim pursuant to its ‘encroachment and adverse possession’ coverage. First Title paid the cost of the survey report, the legal fees for advice on the adverse possession claim and for the value of the land lost when the neighbour’s claim was successful. Payment $72,000

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Good fence lines make good neighbours

After moving into her new home in South Australia, our client discovered that her neighbour’s fence encroached on her land by approximately one metre – a fact that was not uncovered during the conveyancing process when she bought the property (as surveys are not required in some Australian states). Our client sought to have the boundary corrected to improve access to her property, but her new neighbour claimed the land was now his.

First Title paid for a new survey of the land to determine the correct boundary line. We then instructed a contractor to correct the fence line as determined by the new survey and met all costs. We also helped negotiate a resolution with the neighbour to avoid legal proceedings. Our client now enjoys full access to her land.

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Unapproved structures

Watertight policy saves owners thousands

A couple in New South Wales purchased First Title insurance when they bought their new home. Shortly after they moved in, they found their land flooded every time it rained. Eventually, they hired an engineer to inspect their retaining wall, which was approximately 20 years old.

The engineer discovered the retaining wall was built incorrectly and did not allow for drainage. Worse, the wall was built without council approval and did not comply with council requirements. The local council subsequently inspected the wall and issued a notice to the owners to demolish and rebuild it.

As soon as the council issued the notice on their retaining wall, the owners contacted First Title. We obtained council approval for a new retaining wall and quotes from local builders to demolish and rebuild it. We paid all the associated costs, including administration fees, materials and labour, saving the owners approximately $50,000.

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Fraud and forgery

Property fraudsters strike Perth

In 2011, The West Australian newspaper reported that Nigerian fraudsters sold a Western Australian family’s $400,000 Perth home without their consent while they were living overseas.2 One year earlier, the newspaper reported a similar fraud, which saw another Perth home owner lose his investment property.3

In both instances, The West Australian stated that the victims were required to pursue the perpetrators and press criminal charges to obtain compensation. This is usually a long, protracted and highly stressful process that victims must pay for – and success isn’t guaranteed.

If the home owners mentioned in these news stories had a property risk insurance policy with First Title, they would have received comprehensive protection against the loss caused by the fraud.

First Title will defend our clients’ interest in their property and pay all legal costs. If you are unable to recover your home, we will indemnify you for your loss, and pay out the value of the property.

2 ‘Probe into alleged house sale scam’, Gabrielle Knowles and staff reporters, The West Australian, 10 August 2011

3 ‘Taskforce to probe alleged Nigerian scam’, Natasha Boddy, The West Australian, 11 August 2011

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Title problems

Even the most thorough conveyancing process cannot uncover all the potential risks against a property. That’s where property risk insurance comes in.

The sewage disaster

Our clients moved into a newly renovated home in New South Wales. During the conveyancing process, our clients had asked the vendor to provide an up-to-date sewer and drainage diagram as an added precaution. The vendor supplied a diagram and claimed it was up-to-date. However, three months later our clients woke up one morning to find their backyard filled with sewage, which poured down their driveway. Our clients immediately called a plumber, and First Title.

How we helped

We approved and covered the plumber’s remedial action, until the claim could be assessed. We assisted Sydney Water in its investigations as to whether a proper inspection had been carried out as the vendors had claimed. The investigations revealed that the sewer and drainage diagram was seven years old and did not include recent works carried out by the vendor.

We ensured that a correct, updated diagram was submitted to Sydney Water. We also covered repair work to ensure our clients’ sewer and drainage passed a final inspection by Sydney Water. The claim amount was approximately $8,000.

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Miscalculated risks

Even the most diligent conveyancing process cannot ensure the rate calculation is correct. This may leave you with an inherited debt from the previous owners of your property. First Title Home Owners Gold covers the losses arising from rate calculation errors.

The indebted vendor

Our clients purchased a new home in Victoria. Soon after, they were served with a notice from their local council, for unpaid rates of more than $3,000. Our clients contacted their conveyancer, who admitted they had made an error and miscalculated the rate adjustment at settlement. The previous owner acknowledged the debt, but stated that she could not afford to pay it.

How we helped

First Title accepted the claim. Our clients paid the outstanding rates and we reimbursed them for the full amount.

The inaccurate council

Two months after our clients moved into their new home in South Australia, their local council served them with a letter of demand for outstanding rates. After investigating the demand with their conveyancer, our clients discovered that the council had issued them with an inaccurate rates notice during settlement.

How we helped

First Title accepted the claim and reimbursed our clients for the outstanding debt, which totalled $1,500.

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Sewerage Connection

Two years after our client moved into the property, they discovered a sewage problem. Our client hired a plumber to investigate a strong sewerage smell. The plumber advised that the dwelling was not connected to a septic tank as previously thought. Instead, the sewerage from the dwelling was directed into a buried plastic drum, funnelled into a buried pipe and emptied into their paddock.

First Title reviewed the purchase file for the property. The Section 32 Statement noted that the property was not connected to the sewer main. However, the Property Inclusions Statement provided by the real estate agent listed a septic tank as being included in the sale.

First Title accepted the claim pursuant to its ‘sewerage’ coverage. First Title paid for all costs associated with installing a septic tank and obtaining the relevant approvals. Payment $23,000

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First Title does not make any representations about the suitability or appropriateness of any specific insurance product for you. Any advice is general in nature and does not take into account your personal objectives, financial situation or needs. Please read all the disclosure documents (especially the policy wording) carefully or get advice from your solicitor or conveyancer before deciding.