It is fair to say that a lot of people would not want to live in a home where something unpleasant has occurred. There are many people who would object to living in a property if there had been a murder or violent crime committed. In the same way, ongoing occurrences such as excessively noisy neighbours can also be off-putting to potential buyers.
Perhaps it would make no difference to you, but for countless prospective buyers with cultural, religious or superstitious beliefs, it can. This is what makes the issue of ‘material fact’ so difficult for agents; what is an important consideration for one person may be completely irrelevant to someone else.
According to the NSW Fair Trading guidelines, ‘Apart from individual circumstances where an agent understands that a particular issue is ‘material’ to an individual...agents should concern themselves with considering issues which are sensitive for a significant proportion of the population.” Examples given of what could be a material fact include whether the property has a current DA approval, whether it had water damage in the past, or if it was the scene of a serious crime during the current occupation.
A common question by agents is “How long does it take before a material fact is no longer material?” While not providing a definitive answer, the guidelines suggest that agents focus on material facts that relate to the period when the vendor was the owner of the property. The law as it stand put agents in a difficult position: They must act in the best interests of their client, the seller, while at the same time disclose information to prospective buyers that may not be in the best interests of their client. Importantly, the seller does not have to disclose material facts. REINSW believes the obligation to disclose material facts to buyers should be uniform; that is, it should apply to both the seller and the agent.
Source: REINSW Journal April 2013, Vol. 64/03
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