An agent must not fail to disclose a “material fact” that the agent knows or our should have taken reasonable steps to make themselves aware of. (An agent should take reasonable steps to gather all relevant information on a property they are selling or renting).
So, what is a “Material Fact”?
The NSW Fair Trading has defined a ‘material fact’ is a fact that would be important to a reasonable person in deciding whether or not to proceed with a particular transaction.
With property transactions there are two factors to consider: –
- Would the fact sufficiently significant or relevant to influence decision on whether to buy, sell or rent.
- Could be the fact impact the market value of the property.
Section 54 of the Property and Stock Agents Act 2002 prescribes these kinds of “material
- within the last 5 years the property was the scene of a crime of murder or manslaughter.
- within the last 2 years the property has been used for the purposes of the manufacture, cultivation or supply of any prohibited drug or prohibited plant within the meaning of the Drug Misuse and Trafficking Act 1985’.
You can find more information at NSW Fair Trading https://www.fairtrading.nsw.gov.au/housing-and-property/property-professionals/working-as-a-property-agent/misrepresentation-guidelines or contact our friendly property department team on 02 4721 6200 if you would like any further information.
Written by Megan Johnson