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New homeowner discovers seller's illegal act after settlement

The woman was shocked to discover the previous owner had taken the water softening system. Is it breach of contract, or straight out theft?

A new homeowner got the shock of her life after moving into her newly-purchased property when she discovered an expensive water system had been removed from the house.

She claims it was there during her final walkthrough of the house and when she committed to the sale, but it was gone the day she got her keys and moved in.

It appears she let the previous owner stay in the property a few days beyond the agreed settlement day, meaning the house belonged to her. It was during that time he allegedly removed the water fixture from the wall.

"I highly advise against giving the owner extra days after the closing day to move out," she warned on Facebook this week. "Our seller stole the expensive water softener soldered to our house after we closed, and left a burnt hole in the side of our house in the process of removing it."

Homeowner discovers water system removed from house causing damage.
The new homeowner claimed the seller removed the 'expensive' water system from the house causing significant damage. Source: Facebook

A water softener is a filtration system that removes various minerals from drinking water, and they can be pretty expensive according to some who commented on her post.

"I just paid US$6k for my water system. I'd be pissed," one said. While another said they paid "well over" US$10,000 for theirs.

The woman explained the seller's real estate agent said the owner was "planning to take it", but even after saying he couldn't, "he still did it," she claims. A photo shows a large hole in the side of her house where the water system once stood which many claim is damage of property

What rights does the new homeowner have?

While this incident occurred in the US, similar rules to Australia would be applied and what's happened here is illegal, Australian property law Associate Professor Olivia Barr explained to Yahoo News Australia.

How the issue is addressed would depend on whether or not it occurred before or after settlement — the period between committing to the sale and receiving the keys, which in Australia is usually around 60 days — but the outcome would be much the same she said.

Either way what's happened here is a clear breach of contract — if it was agreed the item would stay — and most definitely theft and damage of property, Professor Barr explained.

White house on property in Victoria.
Any fixtures on the house must remain attached to it, property law states.

"Things like water systems and gas systems are embedded into to house, so are part of the house that’s being sold," she said. "That’s not theirs to take, they've sold that, so that’s theft," she concluded — but it is a little complicated.

While technically still the title holder during the settlement period, the seller still has duties and obligations not to harm the property, and doing so will have legal consequences she explained. Although they both have an equal interest in the property.

Fixtures such as these "can be removed by a property owner before a contract of sale is entered into, but not after that time," property law expert Dr Rocco Loiacono from Curtin’s Law School added. "Generally, the buyer in such circumstances may be entitled to delay settlement, or have the cost of any repairs deducted from the purchase price," he said.

If this scenario is experienced during settlement, buyers should contact their lawyer or settlement agent who can resolve the situation, which could mean not going ahead with the sale. But if it's after the fact, Professor Barr said to contact the police, because in that situation it's straight out theft.

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