Anna Doughan, Property and Commercial Lawyer at Robertson Hyetts, answers some important questions asked before buying or selling property.
What new disclosure obligations do Vendors have when selling a property?
The Sale of Land Amendment Act 2019 came into effect on 1 March 2020. This Act provides that a person must not knowingly conceal from a prospective purchaser any material facts about a property being sold.
What is a Material Fact?
A material fact is one which would be important to a purchaser in considering whether to purchase a property and which would ultimately influence that decision and the price they would pay.
A fact would be a ‘material fact’ if the fact results in the property being rare or unusual, or if knowledge of the fact would impact a potential purchaser’s willingness to purchase the property. A fact may also be considered material if it is of particular significance to a purchaser such that the purchaser had specifically asked questions about the fact. As a result, the sensitivities of particular purchasers need to be considered by vendors.
Some examples of a material fact could be if the property had:
– Restrictions on access during particular times;
– A history of contaminants used on the land such as agricultural chemicals;
– Previously been affected by a bushfire or flooding;
– Combustible cladding, asbestos or pest infestations;
– Building work done without the required permits;
– Been the scene of a serious crime such as a murder, extreme violence or used to manufacture illegal substances such as methylamphetamine or hazardous materials.
What are the Penalties of failing to disclose a material fact?
Any person who publishes any statement, promise or forecast which conceals any material fact and is found guilty could face a maximum penalty of $19,826.40 or up to 12 months imprisonment. This could apply to vendors, their agents, solicitors or conveyancers.
Anna Doughan is a Commercial and Property Lawyer with Robertson Hyetts Solicitors. For further advice on all property and commercial matters please contact us on 5434 6666 or 5472 1588