Disclosure and Due Diligence
26 November 2025

Sole v Hutton – disclosure obligations for apartment sales and the importance of thorough due diligence when purchasing


In Sole v Hutton [2025] NZHC 430, the High Court dealt with a dispute over undisclosed weathertightness issues in an apartment complex and delivered a strong reminder about vendors’ disclosure obligations.


In 2019, the Purchasers (the Soles) purchased an apartment in Mount Maunganui for $1,495,000. Less than a year after settlement, they discovered major weathertightness issues affecting the entire building. The Body Corporate embarked on an extensive remediation project, and the Purchasers were hit with more than $1,300,000 in special levies for their share of the work.


The Court found that the Vendors (the Huttons) had attended Body Corporate meetings in 2014 where multiple expert reports highlighted significant leaks and recommended re-roofing and re-cladding of the building. Despite this, the Vendors told their agent that there were no known weathertightness issues and this information was passed onto the Soles.


The Court held that:-


·  The Vendors breached the warranty in clause 11.2(7) of the Agreement for Sale and Purchase of Real Estate, which requires disclosure of any facts that may give rise to liabilities under the Unit Titles Act 2010;

 

·   The failure to disclose the reports and the assurance that there were “no issues” amounted to misrepresentation.


The Soles were awarded $926,806.48 plus interest in damages, including their share of remedial costs (after a 30% betterment reduction, as the remedial works increased the value of the property), alternative accommodation and general damages for stress and inconvenience.


Key takeaways:-


·    Vendors: Always disclose all known issues including historic reports and AGM minutes, even if you believe the matter has been dealt with or is no longer significant.

 

·     Purchasers: Buying a unit title property comes with shared risk. Ensure you complete thorough due diligence including reviewing all Body Corporate records, reports and minutes to understand potential liabilities and future levies.

 

·     Risk management: Non-disclosure can lead to expensive litigation, while thorough due diligence can prevent nasty surprises.


Thinking of buying a unit title property? Our property team can guide you through a thorough due diligence process so you have a clear picture of any potential liabilities before you buy. This can save you from unexpected costs and disputes down the track.


Selling a unit title property? Full and accurate disclosure is not just a legal requirement, it’s the best protection against expensive claims after settlement. If you’re unsure what must be disclosed or how the warranties in the Agreement for Sale and Purchase apply to your situation, get in touch with our property team. We can help you prepare clear, compliant disclosure statements and minimise the risk of future disputes.


https://www.glaisterkeegan.co.nz/our-expertise/property#ResidentialConveyancing

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