In Victoria, section 12 of the Sale of Land Act 1962 sets out offences connected with selling land, and paragraph (d) reaches any person who, to induce someone to buy land, knowingly conceals material facts. Consumer Affairs Victoria says the law against knowingly concealing a material fact from a potential buyer applies from 1 March 2020.
General informationThis page describes the Sale of Land Act 1962 as published in Authorised Version No. 174, and Consumer Affairs Victoria’s guidance, not what applies to any one sale. Consumer Affairs Victoria is the place to check; a solicitor can say whether the section bears on a particular purchase.
The section, one layer at a time
Paragraph (d) only makes sense with the opening words of section 12, which say whom the section reaches and why. Read in order, the layers answer who, why and what.
Who: any person
The section opens with “any person”. It does not confine itself to a seller or to an estate agent.
Why: to get someone to buy land
The person must be acting with the intention of inducing someone to buy land. That intention is the condition on everything that follows in the list.
What: three kinds of conduct in paragraph (d)
Paragraph (d) covers making or publishing a statement, promise or forecast the person knows to be misleading or deceptive; knowingly concealing any material facts; and making a misleading or deceptive statement or forecast recklessly.
The concealment limb is tied to knowledge: its word is “knowingly”. Recklessness appears in the same paragraph, but attached to statements and forecasts, not to concealment.
Section 12 has other paragraphs besides (d). This page keeps to (d), the paragraph that section 12A’s guidelines are made for.
What makes a fact material
“A material fact is a fact that would be important to a potential purchaser in deciding whether or not to buy land, or which may influence a purchaser to buy land at a certain price.”
The same page gives two ways a fact can be material. One looks at buyers in general: an average purchaser would treat it as important to deciding whether to buy. The other looks at one buyer: the fact is known to be important to a specific purchaser.
The guidelines behind paragraph (d)
Section 12A lets the Director of Consumer Affairs Victoria make guidelines that help sellers of land and their agents understand what is likely to be a material fact for paragraph (d). A court may have regard to those guidelines.
Consumer Affairs Victoria publishes them as the Material Fact Guidelines, which it describes as explaining what a material fact is, with examples and with tips on complying for sellers and estate agents.
What Consumer Affairs Victoria tells agents
Alongside section 12, Consumer Affairs Victoria tells estate agents that it is an offence under state and federal law for an agent or an agent’s representative to mislead or deceive by conduct or by representations. Its guidance for agents makes four further points that bear on what a buyer is told.
- Completeness. “Representations must be accurate and complete.”
- Silence. Saying nothing, or leaving out relevant facts, “can be misleading in certain circumstances”.
- Timing. When to disclose depends on what kind of information it is: for example, some facts are best disclosed at the start of a campaign, others when a buyer is genuinely considering the property.
- Intention. In the regulator’s words to agents, an offence can occur “whether or not you intended to mislead or deceive”.
The same page says a property’s characteristics should not be misrepresented, and lists them as including its size, its features and fixtures, its location, its future developments and potential, and its price. It also makes the principal agent, or officer in effective control, responsible for the accuracy of the agency’s advertising and the conduct of its staff.
Section 12(d) is worded differently from that guidance: its concealment limb turns on knowledge, and it reaches any person who acts with the intention it names.
A buyer’s agent in Victoria
Consumer Affairs Victoria describes a buyer’s agent as a licensed estate agent who acts for a buyer for a fee, and says the general rules of professional conduct that bind other estate agents bind buyers’ agents too.