Are you selling your property in Victoria? If yes, then you must be aware of the recent changes to the Sale of Land Act 1962 that came into effect on 1 March 2020. These changes require you to disclose all material facts about the property to potential purchasers, agents, and buyers. In this article, we’ll discuss what constitutes a material fact, when to disclose it, and the potential consequences of not doing so.
What is a Material Fact?
A material fact is any information that may impact a potential purchaser’s decision to buy a property. General facts and specific facts are the two types of facts that constitute material facts. General facts refer to information that an average, reasonably informed purchaser would generally regard as material in their decision to buy land. Specific facts refer to information or facts about the land that is known by the vendor or vendor’s agent, including an estate agent, to be necessary for a specific purchaser. This knowledge could arise if a particular purchaser asks a specific question about the land or informs the vendor/agent of their intended land use.
Some examples of material facts include prior history of violence, flood or fire on the property, building defects such as water leakages or pest infestation, illegal use of the property, plans for large-scale infrastructure development adjacent to the property, illegal construction or construction without a permit, and death or murder on the property.
When Must Material Facts Need to be Disclosed?
Vendors must disclose material facts to the purchasers at the time of showing intent to purchase a property. If new material facts are discovered, they must be disclosed to the purchaser as soon as the vendor becomes aware of them. Vendors and agents may disclose material facts through various mediums, such as marketing leaflets and brochures, before public auctions, during the first visit to the property by potential buyers, or in the vendor’s statement.
What are the Consequences of Failure to Disclose Material Facts?
Failure to disclose material facts by the vendor or the agent can have serious consequences. The purchaser may claim a material breach of contract and withdraw from the sale contract. Vendors may also face financial penalties, compensation, or even imprisonment of up to 12 months or a fine of up to 120 penalty units.
What are the obligations Vendors have in terms of Material Disclosure?
It is the Vendor’s obligation to disclose any material facts that could influence the purchasing decision of the buyer. This obligation is to not conceal any material fact that may cause any loss to the buyer. It is important for vendors to understand the concept of material facts, to properly disclose them, and to be aware of the potential consequences of not doing so. Therefore, we highly recommend vendors to seek legal advice before proceeding with any sale of land and make the vendor’s statement more transparent in terms of material disclosure.
Shamac Lawyers Has You Covered
The recent amendment intends to make transactions more transparent in the real estate sector. Therefore, it is essential for vendors to comply with providing a Vendor’s Disclosure Statement and disclosing material facts to potential buyers. Failure to comply with this obligation may lead to serious consequences for the vendor, including penalties and imprisonment.
At Shamac Lawyers we understand that investing in real estate is a significant decision that involves various legal considerations. We have a team of professional and experienced conveyancers who provide full-length consultations, document checking, and much more to ensure that your property matters are handled effectively. Contact us now for more information and legal advice.
In conclusion, as a property seller in Victoria, it is crucial to understand the recent changes to the Sale of Land Act 1962 and the obligation to disclose material facts to potential purchasers. This article has provided a detailed overview of material facts, when they need to be disclosed, and the consequences of failing to disclose them. By seeking legal advice from professionals such as Shamac Lawyers, you can ensure that your property matters are handled effectively and transparently. Contact us for more information and legal assistance.
Material Fact Disclosure Frequently Asked Questions
A Contract to sell property in Victoria must contain property details, names of the vendor and buyer, the name of the estate agent, if any, details of legal representatives engaged in the transaction, buying price, the deposit paid in advance, and the balance amount due on settlement.
Any fact or information that a normal person would recognize as important to make their financial decision will be considered a material fact. Any information influencing a decision would be relevant in determining whether something is a material fact. Other relevant factors include whether only the vendor knew about the facts, the reactions of other potential leads after knowing the facts, and changes in the society category because of the fact.