Honesty is usually the best policy, but when it comes to selling a home and disclosing information related to the property, it isn’t all that clear.
In Western Australia, seller’s disclosure statements are not mandatory, creating a murky situation around what information is made known to a buyer that might affect their decision to purchase a home.
Although the statement is not mandatory, there is a certain level of expectation when it comes to what information should be shared.
However, deciding on what constitutes a material fact that must be disclosed is a grey area for agents, as they need to factor in the best interest of both the buyer and the seller.
“Anything that affects the property itself has to be disclosed,” JMW Real Estate Principal and REIWA Deputy President Joe White said.
“It’s a grey area when it comes to the reasons why people are selling the home.
“There are reasons like a four-storey building could be built on the next block, or reasons such as the seller getting a divorce – so much of this comes down to an agent’s judgement.
“When it is just gossip – financial circumstances or personal issues – disclosing this information isn’t necessary.”
Mr White said not all information disclosed by the seller would be relevant to every purchaser.
“What could be deciding factors for the average person purchasing a home could be different for a developer, so it is deciding who the information is relevant to,” he said, adding that information provided by the seller themselves may be incorrect.
“Very often, the information you get from the seller is incorrect – they say what they think instead of know,” he said.
“It is up to the agent to do the research and find out what is relevant, and a prudent agent would make an appropriate enquiry.
“For example, are the fences on the boundaries? The seller could say, ‘yes they are’, when they aren’t.
“Agents should do the research on what they’re selling so purchasers know what they are buying.
“Very often you get hints and red flags to dig a little further.”
On whether seller’s disclosure statements should be made mandatory in the state, Mr White said it was only as good as the honesty of the person filling it out.
“A compulsory disclosure form won’t solve the problem,” he said.
“Agents should pull on the threads of conversation with the purchaser to keep them informed.”
According to REIWA, some material facts which a seller should disclose to an agent include asbestos, illegal drug contamination, serious crime committed on the property, current tenancy agreements or leases, pools and spas, building approvals and renovations, encroachments and sewer pipes passing through the property.