Fines for forgetting to disclose material fact prior to home sale (Natalie Snooks / Optimus Real Estate)
- Encroachment of a garage into neighbouring property not disclosed before sale
- Agent told about the issue during appraisal but forgot about it
- Warning to agents to improve efforts to discover and disclose facts
Failing to disclose an encroachment issue prior to the sale of a Nedlands home has resulted in a real estate agency and its former Director being fined a total of $13,000 by the State Administrative Tribunal.
Natalie Jane Snooks, a former Director and the former person in bona fide control of S.Y. & Co (WA) Pty Ltd trading as Optimus Real Estate of City Beach, was fined $7,000 and the agency was fined $6,000 for breaching the Real Estate and Business Agents Act and Code of Conduct.
In July 2018, Ms Snooks conducted an appraisal of the home when the owners informed her about the garage encroaching into the neighbour’s property. Several days later the owners appointed Ms Snooks as their selling agent.
A sales contract was signed by the owners and the buyers in September 2018, but there was no mention of the encroachment. During a building inspection carried out in October 2018, the sellers produced a resurvey certificate that showed an encroachment of between 334 to 338 millimetres for a length of 5.3 metres. As soon as Ms Snooks was reminded of the issue, she immediately informed the buyers.
Settlement of the sale occurred in November 2018 with the buyers subsequently incurring legal and other costs in attempts to remedy the matter.
Ms Snooks admitted that she didn’t take full notes during the initial appraisal as they weren’t officially the selling agent at that time and ‘forgot’ about the encroachment issue, when formally engaged. The agency has since made it mandatory for Seller’s Disclosure Statements to be completed prior to any sale to avoid this happening again.
Commissioner for Consumer Protection Gary Newcombe expressed concern that this is the second recent case where a failure to disclose material facts has occurred.
“Recently another agent was fined for not finding out about a sewer line prior to a land sale which affected the buyer’s building plans,” Mr Newcombe said.
“In both cases, the agents were not being deceptive or dishonest, but their failures resulted in the buyers not being fully informed about the properties before making their decision. The buyers have then incurred extra costs post-sale to deal with the issues that should have been disclosed earlier in the process.
“These cases highlight the need for real estate agents and sales representatives to make reasonable efforts to discover all material facts about the properties they sell, which may include more than just a title search.
“It’s the responsibility of the selling agent to carry out all the relevant checks and to discover and disclose any issues affecting the property being offered for sale so that potential buyers are fully informed. We would recommend that agents ensure sellers complete disclosure statements and all suitable searches, such as Property Interest Reports available from Landgate, are obtained so that any known issues are revealed and confirmed in writing.”
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 email@example.com or by calling 1300 30 40 54.
Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / firstname.lastname@example.org
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