What scary secrets does your house hold that need to be disclosed?
In March 2020, a change to the Sale of Land Act 1962 (the Act) came into effect which requires vendors and agents to not knowingly conceal any material facts from a prospective buyer when selling a property. While haunted houses probably don’t meet this threshold, a house’s other secrets may need to be disclosed.
What is a material fact?
A ‘material fact’ is an important fact that can influence a potential purchaser’s decision to buy a property, or to buy a property for a specific price.
The vendor and its selling agent must be attuned to the specific purchaser, as a fact may be material to one purchaser and not another. Paying attention to the questions asked by prospective purchasers will give a good indication of what’s important to them. A material fact is not gossip or speculation.
Examples of material facts
Material facts include:
- Tests or investigations that show termite infestation, combustible cladding, asbestos or contamination.
- A significant event such as a flood or bushfire.
- A serious crime or event such as a homicide.
- Building works that have been done without a building or planning permit, or that is illegal.
- Fact about the neighbourhood that are not readily known from inspection including development proposals and sinkholes that are likely to affect the use and enjoyment of the property.
- The underlying cause for an obvious physical defect.
- The property has been used as a drug lab.
Disclosing material facts
In order to best protect a Vendor from a future claim, material facts should be disclosed in the sale documents (the Contract of Sale or Vendor’s Statement).
To discuss the management of your ‘material facts’, contact Lisa Fowler in the KKI Property Team.
