A buyer discovers a material defect in a property after settlement. Under which circumstances would they most likely have a successful claim against the vendor?
Correct Answer
B) The vendor knew of the defect and deliberately concealed it from buyers.
Caveat emptor means a vendor generally has no duty to point out defects the buyer could discover. Deliberately concealing a known defect is different: it can amount to fraudulent misrepresentation or deceit, and a claim for damages or rescission can survive settlement. An agent who takes part in the concealment also risks liability for misleading or deceptive conduct under the Australian Consumer Law and disciplinary action.
Why This Is the Correct Answer
Active concealment of a known defect, such as hiding cracking behind new linings, is a form of misrepresentation. The buyer can sue for deceit or seek rescission even after settlement, because caveat emptor does not protect a vendor who deliberately misleads.
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