Agents agree that without clearly defined legislation, they are in a ‘no win situation’ when it comes to disclosing material facts.
After news that the Real Estate Institute of NSW (REINSW) was lobbying the state government to clear up the confusion, readers of REB online agreed the laws were perplexing.
Rent roll broker Chris Goodway said that the laws around ‘material facts’ seemed to contradict themselves.
“It’s puzzling how the Office of Fair Trading can seek to have an agent provide information to a prospective purchaser which is against the wishes of the vendor," he said in a comment on REBonline.com.au.
“Under common law, the agent has a fiduciary relationship to uphold with his vendor, undertaking to do everything in his clients best interest and wishes.
“Therefore Fair Trading is instructing agents to contravene their fiduciary relationship and hold themselves liable to be taken to task by their vendor if caught breaking that relationship.”
Melanie McFarlane from Realcoach couldn’t understand why Fair Trading didn’t use the same guidelines for sales as residential tenancies.
“The Residential Tenancies Act compels a landlord/agent to disclose material facts defined in the Act," she said in a comment posted on REBonline.com.au.
“Everyone is clear about obligations and consequences. Property managers now obtain this info in the agency agreement, therefore proving what the landlord told the agent.
“Vendors often withhold information from their agent because they want to achieve the best price. Agents are reluctant to push too hard for information at the time of listing because they want the listing.
“Without clear legislation the agent is really in a no-win situation.”
An anonymous commenter suggested the industry had two choices, agents disclosing on behalf of the vendor with improved guidelines, or prospective buyers engaging directly with vendors.
“If it is the latter, one thing is for sure, if vendors have to start dealing directly with prospective buyers and be accountable to answering their questions, the industry can only expect vendors starting to question the value of paying agents at all,” they said.