Victoria’s Transparency Obligations when buying or selling property

When buying or selling property, transparency is not just good practice; it is a legal obligation. In Victoria, both vendors and real estate agents are required to disclose certain information that could influence a purchaser’s decision.

These “material facts” play a critical role in ensuring buyers are fully informed and able to make confident, fair decisions about a property.

With recent legislative developments and a growing focus on market transparency, understanding what constitutes a material fact is crucial. Here are some important considerations if you are a vendor selling your property.

Any fact that is important to a potential purchaser in deciding whether to purchase the property and evaluating what is a ‘fair offer’, should be disclosed as it is a material fact. 

Vendors should put themselves in the shoes of the buyer – if you think as a buyer, you would want to know something about the property, you should disclose it!

Material facts include the following (although this list is not exhaustive):

• Building defects which you are aware of, even if they are not obvious, such as structural issues like water encroachment;
• Pesticide use, that might affect an owner or tenant or their pets
• Any previous involvement in criminal history or if a homicide was committed in the property;
• Significant events (such as natural disasters e.g potential landslide); and
• Any restrictions for vehicle access

While informal hearsay will not constitute a material fact, if an expert’s report has been obtained you may need to disclose it in your Vendor’s Statement. 

Victoria’s Sale of Land Amendment Act (the Act) outlines the requirements for disclosure of material facts. Vendors and their agents, should disclose all known material facts to a purchaser at the earliest opportunity.

A failure to disclose material facts may be a breach of section 12 of the Act:

• Through marketing material and other information statements;
• In a contract of sale or s 32 statement;
• On a physical inspection of the property;
• Before the start of any public auctions; or
• Failing to disclose information to a specific purchaser where the vendor held a reasonable belief they were not already aware.

Under the Act, there are significant penalties for a vendor and their agent who knowingly conceals information or provides misleading or deceptive statements.

New laws introduced by the State Government will require vendors to disclose their reserve price at least seven days prior to an auction.

In addition, agents will now have to publicly disclose the sale price of a property once a contract is finalised.

These changes were based on recommendations put forward by the Real Estate Institute of Victoria to promote greater fairness and transparency especially for first time buyers and reflect a major shift by the State Government to deal with obstacles faced by first time or inexperienced buyers.

Vendors need to disclose material facts to the market. Sanicki Lawyers and our related business Western Conveyancing provide our vendors with a detailed questionnaire to complete. This important document ensures that all material facts are disclosed in the preparation of the s 32 and your contract of sale.  

If in any doubt of what to disclose, discuss it with your lawyer and/or conveyancer to get the right advice.

Contact our Conveyancing teams at Sanicki Lawyers and Western Conveyancing to assist you with your legal compliance and minimise the risks of breaching these laws.