The Supreme Court of Tasmania (Holt AsJ) has ruled that the listing of a property under the Historic Cultural Heritage Act 1995 (Tas) constitutes a hinderance to use of the property as a residential dwelling.  The case arose from a contract for the sale of real estate between the plaintiff as purchaser and the defendant as vendor.  The contract contained a condition precedent to completion that at the contract date there were no legal restrictions on the use of the property that may hinder or prevent the purchaser from using it as a residential dwelling.

The purchaser discovered that the property was heritage listed under s21 of the Historic Cultural Heritage Act and brought proceedings under s39 of the Conveyancing and Law of Property Act 1884 (Tas) seeking judicial determination of the question of whether the heritage listing constituted a legal restriction that may hinder the plaintiff in using the property as a residential dwelling.

Holt AsJ ruled that the restrictions on the ability of an owner of heritage listed properties to undertake routine maintenance or repairs imposed by the Historic Cultural Heritage Act, and particularly the real possibility of such works having to be undertaken in a manner that may not be the most cost efficient, constituted a significant limitation on the use of the property and thereby constituted a hinderance.  Holt AsJ therefore ruled in the plaintiff’s favour.

Although not apparent from the judgment the condition precedent appears to be in the same terms as clause 4.1 of the Law Society of Tasmania ‘Standard Form Contract for the Sale of Real Estate in Tasmania (2012)’ which provides:

It is a condition precedent to the Purchaser’s obligation to complete this Contract that, at the Contract Date, there are no legal restrictions on the use of the Property that may hinder or prevent the Purchaser from using the Property for the Property Use.

The judgment could have significant implications for vendors of heritage listed properties and consideration should be given to drawing contracts for the sale of such premises in a manner that expressly acknowledges the heritage listing and the potential consequences that flow from the listing.

Read the judgment of Schultz v. Petan Pty Ltd [2014] TASSC 47 here.