Overview of the Material Fact Guidelines in Victorian Property Purchases:
When it comes to purchasing property, whether it's land, buildings, or Strata in Victoria, there is an often overlooked legislation that aims to protect buyers through the disclosure of crucial information. These guidelines, known as the Material Fact Guidelines, serve as a powerful tool for purchasers to ensure they make informed decisions and conduct thorough due diligence. In this blog post, we will explore the significance of these guidelines and how they can impact real estate agents, vendors, and potential buyers.
The Need for Transparency:
In the past, real estate agents and vendors could rely on the Section 32 document attached to the Contract of Sale or provide generic responses such as "make your own enquiries" or "buyer beware" (Caveat Emptor). However, with the implementation of the Material Fact Guidelines on March 1, 2020, a higher standard of transparency has been mandated. Estate agents are now prohibited from concealing any material facts related to the property being sold. Failure to provide honest answers can result in severe consequences for both the estate agent and the vendor.
The Material Fact Guidelines place substantial pressure on real estate agents and vendors to disclose information that goes beyond what is typically included in the Section 32 documentation. Purchasers now have the right to request additional information and clarification on various aspects of the property. By putting their questions in writing and attaching a copy of the Material Fact Guidelines, buyers can ensure that all verbal inquiries are addressed properly before signing the contract of sale and Section 32.
Covering a Wide Range of Factors:
The guidelines cover a diverse range of factors that potential buyers may want to investigate further. These can include past flooding incidents, water leaks, instances of drug manufacturing on the premises, disputes with builders, insurance claims, undisclosed defects, and any previous professional reports, among others. By seeking written responses to these inquiries, purchasers gain a clearer understanding of the property's history and any potential risks associated with it.
Implications for Real Estate Agents and Owners Corporations:
While real estate agents and vendors are required to provide accurate and complete information, the guidelines acknowledge that in the case of Strata sales, estate agents and vendors will rely on information supplied by an Owners Corporation (OC). This includes the OC Certificate, which is crucial for potential purchasers. However, it is worth noting that not all real estate agents and OC managers may be aware of the existence and significance of this legislation, making it even more important for buyers to exercise their rights and request comprehensive information.