Fines for failing to discover sewer lines during land sale (Richard Saviel / Professionals Michael Johnson & Co)

This announcement is for: 
ConsumerProperty industry
  • Sales rep failed to carry out checks that would have revealed sewer lines
  • Land buyer forced to modify their building plans as a result of the late discovery
  • Employer failed to be more thorough in their review of the matter

A real estate sales representative and the Mt Lawley agency he works for have been fined a total of $9,000 by the State Administrative Tribunal for failing to uncover the existence of two sewer lines on a block of land prior to the execution of a contract to purchase the property, resulting in the buyer being unaware of this material fact.

Sales representative Richard Edgar Saviel was fined $3,000 for failing to make all reasonable efforts to ascertain or verify all material facts related to the sale of a block of land in Beechboro which settled in February 2019, in breach of the Real Estate and Business Agents Act and Code of Conduct.

His employer Beaufort Nominees Pty Ltd, trading as Professionals Michael Johnson & Co, was fined $6,000 for failing to carry out a thorough review of the matter. The agency and Mr Saviel were also found to have breached the Code in relation to the same issue by failing to exercise due care, diligence and skill.

Both the company and sales representative were also reprimanded and ordered to pay $500 each in costs.

The buyer’s builder discovered two sewer lines under the property which resulted in restrictions to building options and the plans had to be re-designed at extra cost.

Mr Saviel had previously obtained and disclosed Landgate documents and a Certificate of Title, which didn’t reveal the existence of the sewer lines. Prior to settlement, neither he, nor the agency, obtained a sewer plan or made a ‘Dial Before You Dig’ enquiry with the Water Corporation which would have confirmed the existence of the sewer lines.

Commissioner for Consumer Protection Lanie Chopping said obtaining and disclosing all material facts in property sales is crucial as it may influence a potential buyer’s decision.

“In this case, the buyer states that they would not have proceeded with the sale had the sewer lines been revealed, so the omission of this important information meant the buyer purchased land that did not suit their initial plans,” Ms Chopping said.

“This resulted in major inconvenience and cost to the buyer who had to modify their plans.”

“The issue of making all reasonable efforts to discover material facts has previously been covered in the compulsory training courses that licensed agents and sales reps must complete, so it’s a major oversight not to carry out all the relevant checks and discover any restrictions on the land being offered for sale.

“Agents need to ensure that systems are in place to ensure staff are adequately supervised and are carrying out their duties as required by the Code of Conduct.”

More information on the obligations of real estate agents, sales representatives and property managers is available on the Consumer Protection website or enquiries can be made by email consumer@dmirs.wa.gov.au or by calling 1300 30 40 54.

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Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / alan.hynd@dmirs.wa.gov.au  

Consumer Protection
Media release
21 May 2021

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