If a licensee fails to disclose all material aspects of a time-share sale or fails
When you are listing a property, it’s important to share all the necessary information with potential buyers. On this page, we outline the related rules and the steps you can take when disclosing information so you can best protect yourself. Show Open and frank discussionYou should have an open and frank discussion with the vendor around the importance of disclosing all relevant information to buyers and the potential repercussions if they don’t. Ideally, this conversation would take place before they sign an agency agreement with you so you can decide if you want to continue with the listing. It is important to encourage the vendor to be open and honest throughout the process. This helps reduce the chances of a sale falling through and minimises the risk of legal action after settlement due to non-disclosure. If it helps the conversation, you could ask the vendor what information they would want to be disclosed to them when they purchase their next home. For example, would they want to be told about previous flooding on the property, or evidence of borer? Related rulesThe Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (Code of Conduct) set out your obligations to parties involved in a transaction. There are two specific rules that address what information you must share - rule 10.7 and rule 6.4.
What do I do if I find a potential problem with the property?Here is some guidance on what to do if you find a potential problem with the property you are listing. You should talk to the vendor about any information you receive and explain you may be obliged to disclose the problem. Talk to the vendor about their options including:
You should discuss what information will be shared and how. It’s important to document the decision and ideally give the vendor a copy of the decision you have reached together. If the vendor can provide information that addresses the problemIf the vendor provides information that proves there is no problem, they may decide that the matter does not need to be disclosed. If the vendor provides information that shows there was a problem but it has been addressed, you both may agree to share this information with potential buyers. You should document the decision and give the vendor a copy of this. Consider rule 6.4 in relation to this decision. If the vendor disputes there is a problem or believes the problem does not need to be disclosedYou should review the information you have and seek more clarity if you are not sure what to do.
Check your agency’s policy on disclosure of problems with a property. How to share informationIt’s important to consult with your vendor about how a problem with a property is shared with interested buyers. You aren’t required to include information about a problem with the property in the marketing or at open homes. Buyers should receive information that could affect their decision to make an offer before an offer is drawn up and submitted to the vendor. Best practice suggests following up any conversations in writing where possible where you have disclosed information to a buyer. It’s important to advise buyers that they may wish to seek expert advice. Disclosure facilitated meeting packAs part of addressing the issue of disclosure, we designed a facilitated meeting guidance booklet, intended for leaders in real estate agencies to use to run a session(s) on disclosure. We also included a flyer on disclosure resources for all licensees to keep for reference. The 2-hour disclosure training programme for licensees can count towards non-verifiable CPD. Download the facilitated meeting notes here. Download the guidance and resources flyer for licensees here. Other disclosure topicsHow useful is this page? |