What must an agent dis­close

Whitsunday Times - - REAL ESTATE -

WHEN­EVER we buy an es­tab­lished prop­erty (as op­posed to off-the-plan) we know we’re buy­ing a prop­erty with a his­tory, but most of the time we aren’t too con­cerned about that his­tory.

How­ever, some­times a prop­erty’s his­tory can in­clude more than a grow­ing fam­ily that up-sized their prop­erty to get a big­ger yard.

Some­times the prop­erty can have a stigma due to re­cent events and these events can in­flu­ence a buyer’s de­ci­sion on whether to buy or not.

In those in­stances, it is help­ful to know what in­for­ma­tion you can rea­son­ably ex­pect to get from the seller’s agent and what the law re­quires of agents in the sit­u­a­tion of a po­ten­tially stig­ma­tised prop­erty.

What is a stig­ma­tised prop­erty?

A prop­erty may be­come stig­ma­tised if it has been as­so­ci­ated with an un­savoury event. While hav­ing no phys­i­cal im­pact on the prop­erty stig­mas can af­fect the way some peo­ple feel about the prop­erty psy­cho­log­i­cally.

For ex­am­ple, what if the pre­vi­ous owner died a peace­ful death in their sleep af­ter 40 happy years in the prop­erty? That is un­likely to in­flu­ence many peo­ple’s buy­ing de­ci­sion. But for some cul­tures, if some­one has died in the prop­erty, re­gard­less of how the death oc­curred, it may be con­sid­ered bad luck to live there.

What is a ma­te­rial fact?

There’s no check-list that tells agents what they must dis­close, but as a gen­eral rule if some­thing is likely to in­flu­ence some­one’s de­ci­sion to buy a prop­erty – a ma­te­rial fact – then it must be dis­closed.

The law does not spec­ify what makes a ma­te­rial fact, but de­scribes it as any fact that “may have a bear­ing on a rea­son­able per­son’s de­ci­sion to pro­ceed with a prop­erty trans­ac­tion”.

Com­mon causes of stigma for prop­er­ties are:

Death, such as a mur­der, sui­cide or nat­u­ral causes;

Crime, such as an as­sault, theft, drug deal­ing, or sex­ual crimes;

Health-re­lated is­sues, fea­tur­ing con­ta­gious dis­eases;

Trou­ble­some neigh­bours (such as the pres­ence of sex of­fender);

En­vi­ron­men­tal con­di­tions, which could in­clude soil con­tam­i­na­tion, air­craft noise, in­dus­trial odours;

Other psy­cho­log­i­cal fac­tors of sig­nif­i­cance to the buyer (for ex­am­ple, the ru­moured pres­ence of ghosts).

This is an area the REIQ feels the Govern­ment should do more on and the REIQ is ad­vo­cat­ing for a spe­cific dis­clo­sure regime. It’s a dif­fi­cult po­si­tion for agents, ven­dors and buy­ers alike to nav­i­gate. More de­tail and greater speci­ficity would help ev­ery­one.

In all in­stances, the REIQ strongly rec­om­mends that ev­ery buyer does their own re­search be­fore buy­ing a prop­erty.

In real es­tate, the prin­ci­ple of caveat emp­tor (buyer be­ware) gen­er­ally ap­plies, which is why buy­ers do their own build­ing and pest in­spec­tions, flood in­ves­ti­ga­tions, con­veyanc­ing checks and other due dili­gence.

Noth­ing is bet­ter than be­ing well ed­u­cated and well re­searched when you are look­ing at real es­tate to buy.

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