Have you heard the term Caveat Emptor? It is a Latin term that means “let the buyer beware” or in South Australia usually phrased “Buyer Beware”. When buying real estate it means the buyer assumes the risk that the property may not be what they expected or may have defects. It serves as a warning that buyers have no recourse with the seller if the property does not meet their expectations.

The assumption is that buyers will inspect and otherwise ensure that they are confident with the integrity of the property to which it often refers before completing a transaction. This does not, however give sellers the right to provide misleading or fraudulent information.

See Also: What is a Caveat?


Under the principle of caveat emptor, for example, a consumer who purchases a property and later discovers that the Hot Water Service does not work is stuck with the defective product. Had they inspected the Hot Water Service prior to the sale they may have changed their mind or asked for a reduced purchase price. Remember unless in the contract as a special condition there is no right to inspect the property before settlement in South Australia

When purchasing property it is common that purchasers believe that the vendor or agent will supply all the information that they need to know about the property. However you may find that the house isn’t what you expected once you move in and once you have settled you are stuck with it. Any costs for repairs are yours and you will have no recourse from the vendor who has probably left the state by now anyway.

So what can you need to do to protect yourself?


As a Purchaser it is up to you to do your own research before signing the contract. The Real Estate Agent has been employed by the Vendor and they do not act for you at all. They are required to disclose certain information by law but they may miss providing you important details that could affect you directly after settlement.

You can search the internet for properties which are similar so you can see what price range you should be offering. Check the neighbourhood to see if it suits where you want to live. Is there a school and public transport nearby? How far away is it to the nearest shopping centre? Are their cafes in the area? These all will be important to you and your lifestyle.


Building and Pest inspections

(usually two different inspectors) are essential and can be added to the Contract as a Special Condition or they can just be arranged for in the Cooling Off period. If it is in the Contract as a Special Condition then the clause must always state that the building inspection is to be to your satisfaction. These inspections will come at a cost but will be well worth it for your peace of mind.

The building and pest inspections will reveal if the property has any defects or if it requires works to be done. The building and pest inspector should also be able to provide an indication of what these would cost.

If there are defects found that are quite costly then you have the following options:

  • Cancel the contract or cool off if you are still in the cooling off period;
  • Check to see if the Vendor will complete the works prior to settlement (an addendum to the contract will be required for this); or
  • Renegotiate the contract price if you would prefer to do the works yourself.

It is best that the negotiations are finalised in the cooling off period as once that has passed you are obliged to purchase the property regardless of what you find.


Most of the questions you may have will be answered in the statutory searches that are provided to you with the Form 1. The best person to go through these documents with you is your conveyancer as they will understand what the searches mean and they will make sure that any issues they find in the Form 1 are discussed with you so you know where you stand. You may find that the searches disclose that the government has a right to widen the road and take part of your land. There could any number of encumbrances and easements all of which you need to understand before proceeding to settlement. This is why they say Buyer Beware!


Another way to minimise your risk is to take out Title Insurance. This protects you from any loss for future events such as finding the boundaries are not where they are purported to be and your neighbour has part of your property. It also protects you if the Council sends you a notice that the pergola has not been approved and you have to pull it down. Talk to your conveyancer about this Insurance as it is certainly worth the once off fee.


However as your conveyancer never actually sees the property then it is up to you as the Purchaser to ask the agent or even the Council some questions.

Some examples of what to ask are:

  • Does the pergola or extension have the required Council approvals?
  • Is the swimming pool compliant?

See Also: 5 questions to ask your conveyancer

There are so many things to think about and you are the best person to find out the answers. Remember buying a property should be an exciting experience and not a stressful one.

Utilise the resources you have and ask all the questions you want. Lastly remember to always contact your Conveyancer before you sign.

 The team at McKay Business Services are all members of the AICSA and are proud Adelaide conveyancers