Disclosure should lie with vendor too: REINSW

Disclosure should lie with vendor too: REINSW

10 April 2013 by Staff Reporter 9 comments

Staff Reporter

The Real Estate Institute of NSW (REINSW) is lobbying the state government to clarify legislation which obligates agents to disclose ‘material facts’ to buyers against the wishes of the vendor.

The legislation currently puts agents in a difficult position to act in the best interests of their client, the seller, while at the same time disclosing information to prospective buyers.

“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,” the announcement from REINSW read.

The institute is asking for a clear definition as to what constitutes a material fact.

“It is problematic for agents to disclose a material fact without a definition of what it is,” REINSW said.

“It is the seller who has the best knowledge of material facts. Further, capturing the seller removes the conflict that currently exists when the agent attempts to satisfy their obligations to both the seller and prospective buyers.”

REINSW also believes that there is a possible argument that material facts should be disclosed in a prescribed manner, the most obvious being in the standard contract form.

“The issue of material fact is complex. Unfortunately, the problem has been handed to the real estate profession without sufficient assistance and guidance," REINSW said.

“This places agents in an untenable position and exposes consumers to risk.”

Staff Reporter

The Real Estate Institute of NSW (REINSW) is lobbying the state government to clarify legislation which obligates agents to disclose ‘material facts’ to buyers against the wishes of the vendor.

The legislation currently puts agents in a difficult position to act in the best interests of their client, the seller, while at the same time disclosing information to prospective buyers.

“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,” the announcement from REINSW read.

The institute is asking for a clear definition as to what constitutes a material fact.

“It is problematic for agents to disclose a material fact without a definition of what it is,” REINSW said.

“It is the seller who has the best knowledge of material facts. Further, capturing the seller removes the conflict that currently exists when the agent attempts to satisfy their obligations to both the seller and prospective buyers.”

REINSW also believes that there is a possible argument that material facts should be disclosed in a prescribed manner, the most obvious being in the standard contract form.

“The issue of material fact is complex. Unfortunately, the problem has been handed to the real estate profession without sufficient assistance and guidance," REINSW said.

“This places agents in an untenable position and exposes consumers to risk.”

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