IF WALLS COULD TALK: Crime, asbestos and other property material facts – what’s the law?

Unless you’re a documentary filmmaker or paranormal thrill-seeker, it’s probably fair to say you’d like to know that nothing horrid – or hazardous – has occurred in your home.

Or at the very least, that you were made aware of that occurrence; say, the presence of asbestos, cultivation of drugs or a death in the property, prior to making the decision to call it home.

But when it comes to exposing a home’s skeletons in the closet (hopefully figuratively), whose responsibility this is has been a complex matter contested for decades. 

Agents have always had to be mindful about representing a property, but the legal requirements for them to disclose sensitive information about a home’s history remained largely unclear – until NSW Fair Trading Guidelines were reformed in March 2020, that is.

The recent changes have defined the specific types of information that an agent (and vendor) must disclose about a home, which may influence someone in deciding whether or not to buy or rent it.

Put simply, NSW Fair Trading calls these ‘material facts’, which are defined as instances when:

  • The property has been subject to flooding from a natural weather event or bushfire (within the last 5 years)
  • The property is subject to significant health or safety risks
  • The property is listed on the register of residential premises that contain loose-fill asbestos insulation that is required to be maintained under Division 1A of Part 8 of the Home Building Act 1989 (more on this here)
  • The property was the scene of a crime of murder or manslaughter (within the last 5 years)
  • The property has been used for the purposes of the manufacture, cultivation or supply of any prohibited drug or prohibited plant within the meaning of the Drug Misuse and Trafficking Act 1985 (within the last 2 years)
  • The property is, or is part of, a building that contains external combustible cladding to which:
    • There is a notice of intention to issue a fire safety order or a fire safety order has been issued requiring rectification of the building regarding the external combustible cladding, or
    • There is a notice of intention to issue a building product rectification order or a building product rectification order has been issued requiring rectification of the building regarding external combustible cladding
  • The property is, or is part of, a building where a development application or complying development certificate application has been lodged under the Environmental Planning and Assessment Act 1979 for rectification of the building regarding external combustible cladding.

So who must inform the agent?

Of course, there’s another side to duty of disclosure – and that’s what the agent has been made aware of at the time, by the vendor. While the saying goes ‘you only know what you know’, agents are still legally required to inform themselves and to have a reasonable knowledge of the property they are about to sell or lease. 

However, property owners selling through an agent are also required to acknowledge the disclosure of sensitive information about their property – typically through a material facts clause when signing an Agency Agreement. 

Inevitably, there are still some murky waters when it comes to material facts, but the NSW Fair Trading 2020 reforms are a step in the right direction in legislating transparency about the history of a property. As for buyers seriously considering a property but wanting peace of mind, it’s always a good idea to ask the question: has anything material or significant happened to this property?

Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au

Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au

Prudential Real Estate Macquarie Fields |  (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au