By Emma Jackson, Lawyer, Ford Sumner Lawyers | Published 30 July 2026
The recent High Court decision in Jacobsen v The Locals Ltd [2026] NZHC 1744 provides an important reminder for both vendors and purchasers: property disputes often arise because parties later disagree about what was said, what was disclosed, and what should reasonably have been understood from the information provided.
The plaintiff in Jacobsen purchased an apartment and subsequently discovered significant building defects affecting the wider development. The plaintiff/purchaser then brought a claim against the real estate agency, the lawyers that had acted for her, and the vendors.
The claim against the vendors, which the High Court has now struck out, alleged that:
- The vendors breached the vendor warranty contained in the agreement for sale and purchase (“Agreement”); and
- The vendors were liable for a misrepresentation the real estate agent had made.
The dispute in Jacobsen v The Locals Ltd
Before the Agreement was signed, the purchaser asked the vendor’s agent about potential leaky building issues due to building materials. The agent’s response incorrectly stated that, as the property was a concrete build, there was no plaster. At the same time, however, the agent had provided the purchaser with access to extensive body corporate documents, including meeting minutes, disclosure material and expert reports discussing ongoing remediation projects, water ingress issues, defects and the possibility of future special levies.
The central issue became whether the vendor had failed to disclose relevant information, and whether the agent’s statement amounted to an actionable misrepresentation.
The vendor warranty claim: Why disclosure was critical
The Court found that the purchaser had been provided with sufficient body corporate information before entering the Agreement, and that the vendors had no knowledge beyond the information that had been disclosed. Because of this, the purchaser could not establish a breach of the vendor warranty.
Lesson for vendors: Full disclosure remains the best defence
The vendors succeeded largely because the relevant information had been provided before contract formation. Had important documents not been disclosed, the outcome may have been very different. Vendors should disclose relevant body corporate records, known remediation projects, known special and proposed levies, and keep records of what information was provided and when.
Lesson for purchasers: Read the documents, and have a lawyer review them
The purchaser argued that she did not appreciate the extent of the building defects.
However, the Court found that the relevant information had been disclosed through body corporate records and associated materials. The Court’s decision makes it clear that purchasers should carefully review, and seek legal advice on, all information disclosed by, or on behalf of, vendors.
The misrepresentation claim: disclosure again critical
The Court was not persuaded by the argument that the real estate agent necessarily lacked authority to make statements about the building, instead accepting that comments regarding construction materials and weathertightness concerns could arguably fall within the ordinary scope of a real estate agent’s role.
Crucially however, the allegedly misleading statement was made at the same time as the disclosure of documents identifying defects and remediation issues. This led the Court to conclude that, when viewed in context, the statement did not constitute an actionable misrepresentation regarding the defects later complained of.
Lesson for vendors: Do not assume an agent’s statements are harmless
Although the Court ultimately dismissed the misrepresentation claim, it did not fully accept the argument that the agent’s comments fell outside the scope of the agent’s authority.
That aspect of the judgment should concern vendors.
Statements made by agents can, in some circumstances, become statements made “on behalf of” the vendor. Casual comments about construction, defects, weathertightness, compliance, future value or insurability can create significant liability risks.
Lesson for purchasers: Ask questions and verify the answers
The purchaser did exactly what many prudent buyers do: she asked questions about building materials and potential weathertightness risks.
However, purchasers should not rely solely on informal email exchanges or verbal assurances.
If a purchaser has concerns about issues such as weathertightness, structural issues or building defects, they should seek independent expert advice before the agreement becomes unconditional.
Why legal advice is essential for both vendors and purchasers
Significantly, the purchaser in this case received a large volume of disclosure material. The dispute ultimately centred on what that material meant and whether it was sufficient. That is precisely where experienced legal advice adds value.
For both sides of a transaction, the lesson is simple: obtaining appropriate advice before signing an agreement is far less expensive than litigating over what was said, disclosed, or understood after settlement.
If you would like assistance or advice on buying or selling property, please contact our conveyancing experts Sarah Churstain or Mary Ward-Tyree.
Frequently Asked Questions
The Unit Titles Act 2010 outlines the body corporate information required to be provided to purchasers before the entering into a purchase, in the form of a Pre-Contract Disclosure Statement. In Jacobsen, the High Court found the purchaser had been given sufficient body corporate information before the Agreement was entered into — including meeting minutes, disclosure material and expert reports discussing remediation projects, water ingress, defects and possible future special levies. Because the vendors had no knowledge beyond what had been disclosed, the vendor warranty claim could not be established.
In addition to an agent’s responsibilities under the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012, in certain circumstances they can be held liable for their statements under the Contract and Commercial Law Act 2017. The Court in Jacobsen was not persuaded that the agent necessarily lacked authority to make statements about the building, and accepted that comments on construction materials and weathertightness could arguably fall within the ordinary scope of an agent’s role. On these facts, however, the statement was made at the same time as documents identifying the defects were disclosed, so it did not constitute an actionable misrepresentation.
In addition to the Pre-Contract Disclosure Statement, the Unit Titles Act 2010 also requires that the vendor provide a Pre-Settlement Disclosure Statement to the vendor no later than the fifth working day before settlement. In addition to those statements, the safest approach is to disclose all relevant body corporate records, known remediation projects, and known special and proposed levies. Vendors should also keep records of what information was provided and when — in Jacobsen, evidence that disclosure occurred before contract formation was central to the vendors succeeding.
When the relevant information is provided to the purchaser, the purchaser’s lack of understanding is unlikely to protect them, as the onus is on the purchaser to take the necessary steps to understand the information. The purchaser in Jacobsen argued she did not appreciate the extent of the building defects, but the Court found the relevant information had been disclosed through body corporate records and associated materials. Purchasers are expected to review disclosed material carefully and to seek legal advice on it.
Purchasers should not rely solely on informal email exchanges or verbal assurances. Where there are concerns about weathertightness, structural issues or building defects, independent expert advice should be obtained before the agreement becomes unconditional.
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