Changes to the Sale of Land Act 1962 came into effect on 1 March 2020. These changes require that vendors and agents must not knowingly conceal a material fact about a property from a potential purchaser with the intention of inducing the purchaser to buy the land.
Section 12(d) of the Act states:
Any person who, with the intention of inducing any person to buy any land –
(d) makes or publishes any statement 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
shall be guilty of an offence against the Act.
The penalty for breaching the section is 120 penalty units or up to 12 months imprisonment.
Guidelines as to what constitutes a material fact for the purposes of s12(d) have been provided by the Victorian government on the Consumer Affairs Website. Examples of material facts in these guidelines include:
- prior tests or investigations have revealed (or the vendor or agent knows of) a defect in the structure of the building, a termite infestation, combustible cladding, asbestos or contamination through prior use of the land;
- building work or other work done without a required building permit, planning permit or that is otherwise illegal; and
- the property has been the scene of a serious crime such as a homicide, or use of the property for the manufacture of substances such as methylamphetamine.
Vendors and/or agents must answer questions from prospective buyers about material facts as fully and frankly as possible.
For advice or assistance in relation to conveyancing or property matters generally please contact Fleur Craig of Armour-Craig Legal on 5636 4986.