Author: Sjanna Sandalova.
When it comes to selling your house and disclosing information about that property to a buyer, the area is not so black and white.
Even though in Western Australia, a Seller’s Disclosure Statement is not mandatory, there is the expectation that you should disclose any material facts that could affect a potential buyer’s decision, as a buyer can always request one to be filled out.
Deciding what is a material fact and what isn’t is kind of a grey area, especially for agents. On one hand the agent is required to operate in your best interest and sell your home at the best possible price, while on the other hand they are also legally required to share material facts that are relevant to the sale of the property.
So why disclose?
It is best to be honest with your agent at the very start of the selling process. In more serious cases, you could risk hefty penalties and even jail time and the best-case scenario is losing a potential buyer. To save you court time and money, it’s not worth the risk.
Even though the rules in WA are quite relaxed when it comes to seller disclosure, the Australian Consumer Law (ACL) has provisions that make it an offence to mislead or deceive parties to a contract.
Here are eight material facts that you should disclose to your agent before you sell.
Most states require you to disclose if your property has, had or could have asbestos, because it has negative long-term health effects. If your property has asbestos, it is perfectly legal to still sell it but make sure you disclose this as it could result in you getting sued.
2. Illegal drug contamination
Anything that is considered a health hazard should be disclosed. Therefore, if you know that there is or was contamination of the property through the use of illegal drugs, then that needs to be disclosed to the agent.
If the buyer becomes ill from exposure to a known former drug lab or smoke house, the real estate agency and owner could be at risk of legal action.
Although you cannot disclose what you don’t know, it’s unlikely that recreational drug use would be considered a material fact unless it was known or became known to the agent. But, if the property was previously known to manufacture drugs or was a smoke house, this must be disclosed.
Read Illegal drug activity in homes for more information.
3. Serious crime committed on the property
There is an expectation from the community that any serious crime committed on the property will be disclosed. Depending on the seriousness and time frame of the crime committed, the agent might not see it as a material fact.
For example, something that happened 70 years ago, that was never talked about in the news, might not be as serious then a well-known murder case that happened 20 years ago. It is up to the agent’s discretion to decide what might alter a buyer’s decision however, it is still important to disclose this information if it is known to you.
4. Current tenancy agreements or leases
The standard term to a contract is that the buyer will have vacant possession at settlement. If there is a lease in place, then it needs to be a condition of the contract.
5. Pools and spas
If you have a pool or spa which was included in the property when you purchased it or built as an add on, you will need to have a pool certificate registered with your local council.
In addition, the WA Government has strict rules in place for pools and spas such as appropriate barriers to keep young children out.
If your pool or spa does not have a certificate or complies with these rules, let your agent know.
6. Building approvals and renovations
If you have made any previous renovations to your property without the local government’s approval you will need to let the agent known about it.
Most renovations or add-ons to the property will need to have the correct up-to-date certificates.
In real estate, an encroachment is a situation where a property owner violates the property rights of their neighbor by building on or extending a structure to the neighbor’s land or property.
Any known encroachments of buildings on the property that go over onto an adjacent property need to be disclosed. This includes any dividing fences that is not on the boundary.
8. Sewer pipes
Except in relation to a strata lot, if any sewer, pipe, cable or other installation passes through the property to provide services to other land then it must be disclosed.
If you are still unsure of what to disclose when selling your property, it is best to seek guidance from your selling agent. To find a local REIWA agent, go to reiwa.com AgentFinder.
For more information, visit the WA Department of Consumer Protection website.