Commissioner for Consumer Protection, Gary Newcombe has issued a reminder to the real estate industry to ensure the industry’s professionals fully disclose material facts about a property.
Mr Newcombe said the real estate market had seen the quick negotiation of sales transactions, with some homes being sold almost ‘sight unseen’.
“In recent months we have seen two cases where the State Administrative Tribunal issued fines to sales representatives, and their agencies, for failing to disclose material facts about properties they were selling,” Mr Newcombe said.
“These failures adversely impacted the buyers,” he said.
“These cases highlight the serious implications that can arise if real estate agents, sales representatives and others involved in property transactions fail to carry out proper checks as soon as practical.”
Mr Newcombe said the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 set out obligations relating to the disclosure of information.
“In addition, the Australian Consumer Law has provisions that make it an offence to mislead or deceive parties to a contract — this can be by omission,” he said.
Mr Newcombe said it was the responsibility of the selling agent to make all the necessary checks for any possible restrictions regarding a property and disclose this information so that prospective buyers could make a fully-informed decision before entering into a contract.
“At a time when properties are selling within a relatively short time-frame, I also advise that agents should ensure sellers complete disclosure statements so any known issues are revealed and confirmed in writing and suitable searches are undertaken,” he said.
“While there is no specific definition as to what constitutes a material fact, it could include what would be important to a reasonable person in deciding whether or not to enter into a particular transaction,” Mr Newcombe said.
