Material Facts Clause NSW

In recent changes to the PSBAA (Property Stock and Business Agents Act) ,here in NSW, real estate agents are legally obligated to disclose all material facts to purchasers about the properties that they are selling. This information is largely garnered from the seller of the property. The very definition of what constitutes a material fact, however, is vague and open to misinterpretation, in my opinion.

The REI advises that the definition of material fact should be explained to sellers, as thus:

A material fact is a fact that is of sufficient significance or relevance to influence the decision of a reasonable purchaser or lessee to acquire an interest in the property.

REINSW go on to advise that the following examples would constitute material facts that the seller may wish to advise the agent of, in order for him/her to accurately represent the property to potential buyers:

* Potential psychological stigma attached to the property. For example, where the property has been the scene of a serious crime – while this may not represent a physical barrier to the use of the property, it may significantly affect the extent to which a purchaser is able to enjoy the property.


* Current DA approvals for properties in the immediate area. For example, a neighbour may have approval for extensions to their house that will block views from the property being marketed by the agent.


* Activities of neighbours. For example, the owner/occupier of an adjoining unit may play extremely loud music late into the night on a regular basis. Another example may be that the owners of the property across the road periodically use their front yard as a dumping ground for old car bodies.
The activities of neighbours that may amount to material facts requiring disclosure are myriad, and what one potential purchaser/lessee considers material may be of no consequence to another. Therefore, Agents need to find out as much as they can from the Principal.

 

I agree Jaq

I think this will be very difficult to apply in practice. It's just too vague.

Cheers
N