When selling property in Victoria, many sellers may be used to terms such as ‘Section 32’ or ‘Vendor’s Statement’. Usually, your legal representative will assist you with the preparation of this document in anticipation of your sale. It is important to note however that the Contract may be rescinded by a Purchaser if an adequate Vendor’s Statement is not provided to them at the time of sale (noting the obligations under section 32K of the Sale of Land Act 1962 (Vic)).
However, what happens when you fail to disclose important information concerning the property, but this information does not strictly fall under one of the prescribed ‘disclosure’ sections of the Sale of Land Act 1962 (Vic)? Do you have to disclose this information?
The short answer is, it depends on what information needs to be disclosed!
The key section of the Sale of Land Act 1962 (Vic)
It is important for all Vendors to recognise the recent amendments to section 12(d) of the Sale of Land Act 1962 (Vic). The section outlines how “any person, with the intention of inducing any person to buy any land makes or publishes any statement, promise or forecast which he knows to be misleading or deceptive or knowingly conceals any material facts or recklessly makes any statement or forecast which is misleading or deceptive is guilty of an offence.”
Examples of Material Facts
Material Facts can be both general in nature about the purchase of the property, or they can be specific to the actual property. Examples include, but are not limited to, the following:
- history of extreme violence on the property,
- A property which has been previously used to manufacture illegal substances, such as methyl amphetamine,
- A property which has previously been used for the disposal of chemicals,
- A large scale building development about to commence across the road, and
- Undisclosed building defects, such as water leaks.
You can access further information and a more comprehensive guide at Consumers Affairs Victoria.
What are the repercussions if you fail to disclose material facts?
Essentially, if you fail to disclose material facts when preparing the Contract of Sale and Vendor’s Statement, you as the Vendor may not only face penalties under s12(d) of the Act, but you also may face other consequences.
Importantly, s48A of the Sale of Land Act 1962 (Vic) outlines how many aspects of the Australian Consumer Law and Fair Trading Act 2012 (Vic) will apply. This means that a court may have the power to order financial penalties, compensation, and in extreme cases, your sale and settlement may be jeopardised.
What should you do when considering to sell your property?
Whenever you are considering the sale of property, you should ensure that you disclose all relevant information to your legal representative at the start of the matter. At Sharrock Pitman Legal, as Accredited Property Law Specialists, we are well equipped to assist you to work through all potential material facts scenarios to ensure that your interests are protected. If you require assistance, please feel free to get in touch on 1300 205 506 or alternatively fill in the contact form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Andre is a Principal of Sharrock Pitman Legal.
He heads our Property Law Group and is an Accredited Specialist in Property Law (accredited by the Law Institute of Victoria). He also deals with Commercial Law. For further information, contact Andre Ong on his direct line (03) 8561 3317.