What is a material fact and what must I as a vendor disclose?

Section 12(d) of the Sale of Land Act (Vic) 1962 makes it an offence for a vendor or agent to knowingly conceal or withhold a material fact about land that is for sale, with the intention to induce any person to buy any land. Please follow our main conveyancing page if you look for property conveyancer Mitcham.

The maximum penalty for a person who knowingly conceals a material fact about property is a fine of over $19,000 or up to 12 months imprisonment.

A material fact is one that an average purchaser would consider important to their decision whether or not to buy a property which may influence them to buy land at a certain price. A fact may be material:

  • If an average person would consider it important when deciding whether or not to buy a property, or
  • If a fact is known to be important to a particular purchaser.

The fact must be material for a failure to disclose to be an offence.

The Director of Consumer Affairs has made guidelines which give examples of the facts that are considered material and must be disclosed, including (but not limited to):

  • Prior tests and investigations that reveal a defect in the structure of a building, termite infestation, asbestos, combustible cladding, or contamination.
  • The underlying cause of a physical defect that is not obvious to a purchaser (for example defective stumping).
  • Where there has been a significant event at the property such as flooding or bushfire.
  • If the property has been the scene of a serious crime that may create long term potential risks to the health and safety of occupants such as extreme violence (eg murder) or use for manufacture of illicit substances or use of hazardous materials.
  • If building works have been done without a building or planning permit, or which are
    otherwise illegal.
  • Any facts about the neighbourhood that is not immediately apparent upon inspection and
    that would likely affect the use and enjoyment of the property (for example, a sinkhole,
    development proposals or surface subsidence).

For further information, the Material Facts Guidelines is available for download on the Consumer
Affairs Victoria website at https://www.consumer.vic.gov.au/housing/buying-and-selling-
property/selling-property/preparing-to-sell-your-property.

A vendor and or selling agents must disclose a material fact as soon as a purchaser indicates that they are considering buying the property. The material fact can be disclosed in marketing material, in the Section 32 Vendor’s Statement or Contract of Sale, by specific disclosures or before the start of a public auction.

If a purchaser asks a vendor or agent a question about the property, the vendor must answer the question fully and frankly to the best of their knowledge. If the vendor has no knowledge of the matters the purchaser has raised, the vendor can advise that the vendor does not know, that is, the vendor is not required to carry out tests or investigations of the property to determine the answer.