An investment property owner has won a claim payment dispute after fire damaged an old house that was advertised as needing “tender loving care” when it was purchased.

Suncorp denied the claim as the man had declared the home to be in “good condition”, but an inspection after the fire showed structural and maintenance issues, including rotting window frames and fascia boards.

The Australian Financial Complaints Authority (AFCA) says the insured, a doctor living in Victoria but not near the home, did not get a pre-purchase inspection report.

The man conducted a cursory inspection to make sure the house was not falling down, knew it had been previously occupied and established that people were willing to rent the property in its current condition.

It was also argued he was not qualified to assess if a board was showing wood rot or was simply worn due to age.

“The complainant admits there was paint peeling from the exterior boards of the home, and the home was old and requiring TLC, but he does say it was in good condition,” AFCA says.

The determination notes that “notwithstanding what the complainant has said, it is clear the home needed maintenance on purchase and was advertised as in need of a renovation or demolition to develop the property”.

The insurer says the man ought to have realised the home was not in good condition and a reasonable person would have noticed the issues.

AFCA says there is no significant evidence of the state of the home at the time of purchase, and the complainant was entitled to note the previous occupancy as evidence it was in liveable condition, as well as the lack of complaints from his tenants when renewing cover.

“The complainant is not an expert on the condition of homes and it is not reasonable to impose on him a level of knowledge greater than a reasonable person because in hindsight an interested observer says they would have been aware of the damage,” AFCA says.

The duty of disclosure had not been breached and the insurer should cover the man’s claim and make a $1000 payment as a contribution toward his legal expenses, AFCA determined.

The decision is available here.