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Material facts when buying property, a guide by Dotto

SA and TAS · two films of five

Misleading conduct when buying in South Australia and Tasmania

South Australia’s part of this guide rests on the national Australian Consumer Law. Tasmania’s follows the advice its Property Agents Board gives agents on false statements, material facts and stigmatised property.

A property listing drawn on a sheet, with the SA and TAS tracing films laid square over it so the registration marks line up, and dashed red pencil on the listing. The other films are set aside to the right. SA TAS VIC WA QLD
The South Australian and Tasmanian films, laid square together. One ring runs along the ground line of the land itself; the other circles a single window.

For South Australia, this guide draws only on the Australian Consumer Law, which forbids a person in trade or commerce to engage in misleading or deceptive conduct, and lists false or misleading representations that may not be made about land. For Tasmania, it follows the Property Agents Board’s advice note: the Board explains that, under section 56 of the Property Agents and Land Transactions Act 2016, it is an offence for a property agent to represent anything the agent knows to be false or misleading about selling or letting property.

General informationThis page describes the Australian Consumer Law as published on the Federal Register of Legislation, and the Tasmanian Property Agents Board’s advice note, not what applies to any one sale. The Board itself calls its note a summary and general overview that is not all-inclusive and is not legal advice. A solicitor can say how either applies to a particular purchase.

South Australia: the national law

Section 18 of the Australian Consumer Law is one sentence long:

Australian Consumer Law, section 18(1)

“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

The condition that carries it is “in trade or commerce”. Whether a particular sale happens in trade or commerce is a question for a lawyer, and this page does not answer it.

The section also reaches conduct that is only likely to mislead or deceive.

Seven things not to misrepresent about land

Section 30 applies, in trade or commerce, in connection with the sale or grant of an interest in land, its possible sale or grant, or its promotion by any means. In that setting, a person must not make a false or misleading representation about:

  1. a sponsorship, approval or affiliation the person making it claims to have;
  2. the nature of the interest in the land;
  3. the price payable for the land;
  4. the location of the land;
  5. the characteristics of the land;
  6. the use the land can be put to, or may lawfully be put to;
  7. whether facilities associated with the land exist or are available.

Section 30 also says it leaves untouched the other provisions of Part 2-1, which holds section 18, and of its own Part, as they apply to interests in land.

On silence, the ACCC says that in some circumstances a failure to disclose information “can be misleading”. Anyone may report a false or misleading claim to the ACCC.

Tasmania: what the Board’s note says

The Property Agents Board writes for property agents. Its note separates what the offence in section 56 requires from what the Board expects of an agent beyond it.

The offence, as the Board explains it

Section 56 makes it an offence for a property agent to represent, in any way, something the agent is aware is untrue or misleading about selling or letting property.

Knowledge is essential: the agent must have known, at the time the information went out, that it was false or misleading.

On the Board’s reading, the section does not by itself oblige an agent to make enquiries, or to check independently what a client or anyone else supplies. The Board adds that how far an agent may need to make enquiries or check information depends on the circumstances. If an agent could have learned before making the statement, by proper enquiry, that the information was false or misleading, made no enquiry, and the statement then proves false or misleading, the Board says the agent would likely be found guilty of unsatisfactory professional conduct or professional misconduct.

The responsibility beyond it

The Board still holds agents to a professional responsibility: as far as reasonably practicable, information published about a sale or lease must not be false or misleading.

That responsibility is not limited to advertising. The Board extends it to every form of communication, including what an agent says directly to a prospective buyer or tenant.

Material facts, in the Board’s words

The Board treats as material any fact that could affect whether a person buys or leases a property, or what they pay. It accepts the term is hard to pin down, because what weighs heavily with one person can mean nothing to another.

Its expectation is that property agents disclose every fact a reasonable person would expect to hear, which can include a fact that would not trouble every buyer or tenant but could stigmatise the property for some.

The note gives stigma its own heading. A property is called stigmatised when a stigma attaches to it because of something that happened at it or near it, and the Board says the stigma can affect the price and whether people decide to buy or rent.

The Board also points to the Australian Consumer Law, noting that section 18 covers every kind of conduct and communication, from conversations, emails and texts to advertising and negotiation.