Material Fact Guidelines - changes effective 1 March
Date: 28 Feb 20
The Sale of Land Amendment Act 2019 (Amendment Act) was passed by the Victorian Parliament on 28 May 2019 and received the Royal Assent on 4 June 2019 making a number of amendments to the Sale of Land Act 1962 (the Act), including an amendment to section 12(d) of the Act.
The Key Changes:
The Director of Consumer Affairs Victoria will be able to make Guidelines to assist vendors and their agents understand what a material fact is likely to be for the purposes of Section 12(d). Courts may have regard to any such Guidelines.
At this stage it is impossible for vendors, agents, and real estate agents to know or anticipate the extent to which a Court is likely to give regard to the Guidelines however the REIV recommends that once the Guidelines are published, our Members should read and understand the content.
Section 12(d) provides:
Any person who, with the intention of inducing any person to buy any land -
(d) makes or publishes any statement promise or forecast which he knows to be misleading or deceptive or knowingly conceals any material facts or recklessly makes any statement or forecast which is misleading or deceptive
shall be guilty of an offence against this Act…
The key change to this provision is that the word “knowingly” replaces the word “fraudulently”.
This means it is an offence if a vendor or agent knowingly conceals a material fact about a property for sale with the intention of inducing a potential purchaser to buy the land. It will be sufficient to amount to an offence if a vendor or agent withholds a material fact which the vendor or agent knows to be material. There is a penalty for breaching this provision with a fine of 120 penalty units (currently $19,826.40) or up to 12 months imprisonment.
Next Steps:
The REIV has made a submission to the Victorian Government on the proposed Guidelines document. Consequently, we have been advised that there have been substantial changes made to the draft Guidelines. We have not yet been advised when those will be published.
The REIV will provide comprehensive information regarding the Guidelines once they are published by the Director of Consumer Affairs Victoria. In the meantime, and until the Director publishes the Guidelines, all estate agents should take positive steps to inform any potential purchaser of any matter that might be considered as a material fact.
The final CAV Guidelines are not yet available.