As lawyers in New Zealand, we see plenty of litigation about defect disclosures (or lack of disclosures) in property transactions. The most common areas where purchasers accuse vendors of failing to disclose defects are weathertightness, earthquake damage, and lack of building consents for alterations. These are Kiwi issues and not necessarily big problems in other countries. But properties in the UK have problems of their own when it comes to defect disclosure, and a big one at the moment is Japanese knotweed.

In the UK, the undisclosed presence of Japanese knotweed has been the subject of a lot of litigation. Japanese knotweed is an invasive plant that spreads quickly and is very difficult to eradicate. Its root system is extensive, tough, and can cause significant property damage by forcing apart brickwork, concrete, pipes, and drains.

In the English decision of Downing v Henderson (2023) a purchaser was awarded £127,000 (about NZ$279,000) against the vendor after finding Japanese knotweed growing behind the garden shed. When marketing the property, the vendor ticked the box on a property information form that said there was no Japanese knotweed present. Despite the vendor’s defence that he reasonably believed this was true, the court found that he had misrepresented the state of the property.

Standards for disclosure on the existence of Japanese knotweed are high. Vendors have to be certain that that the property is not affected, including beneath the ground and within 3m from the boundary. Where there is uncertainty, a vendor would be better to say that the existence of Japanese knotweed is “not known” rather than to say that it is not present.

Interestingly, the basis of this claim was the misrepresentation on the standard form defect disclosure sheet. There would be nothing stopping New Zealand implementing such a form. At the moment, the defects disclosed are really based on the real estate agent’s advice and not standardised.

Although Japanese knotweed itself has not been a subject of litigation in New Zealand, thank goodness, litigation over the failure to make adequate disclosures is prominent. Disputes about the failure to disclose uneven floor levels, indicating potential foundation damage, have been common in Christchurch since the Canterbury earthquake sequence in 2010-11 and are still ongoing. A potential next big issue nationwide is disclosure around flood risks and landslips – especially in light of Cyclone Gabrielle and the floods over the last few years in Auckland, Dunedin and Nelson.

Liability for non-disclosure doesn’t just rest with the vendor – real estate agents marketing the property have a duty to pass on any information disclosed to them or that they should reasonably know, and building inspectors can come under fire for failing to identify defects during their inspections.

When you’re selling property, take a moment to reflect on if there are any issues you know about. We often hear “I knew about the defect, but it never bothered me” from vendors. Consider whether the quirks in your property are defects that should be disclosed. Or rather, whether anyone could consider the quirks in your property to be defects. There is sometimes a fine line and it is understandable to want to maximise the value of your property. Take advice from your real estate agent or lawyer. You can’t rely on ‘caveat emptor/buyer beware’ in New Zealand anymore.

Japanese knotweed is a problem we don’t face here, but it is interesting to see that the English law on non-disclosure of defects is essentially the same as the New Zealand law, even if the defects are different. ν

Wynn Williams is a top law firm with offices in Auckland, Christchurch, and Queenstown, internationally recognized by Chambers and Partners, Legal 500, and NZ Law Awards. wynnwilliams.co.nz