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Material fact
The extent of an agent's obligations regarding the disclosure of material facts to potential purchasers and lessees has been a matter of particular concern for some time. The concern centres on the fundamental imbalance between the respective disclosure obligations of Agents and Principals.
These guidelines are intended to assist licensees and certificate holders to better understand their legal obligations under the Property, Stock and Business Agents Act 2002 (NSW) not to misrepresent the characteristics of properties offered for sale. The guidelines are not exhaustive, nor intended to constitute legal advice. They are provided to clarify the types of statements or action that could be interpreted as a misrepresentation or concealment of material facts, and the circumstances in which they might arise.
To download the Commissioner's guidelines, click here.
REINSW has prepared an Advice to Members setting out some background to the issue of material fact, discussing how to explain "material fact" to Principals, and outlining the way forward. Members can access this advice by clicking here. 
In order to address the issue of "material fact", a new clause has been inserted into REINSW agency agreements. The Material Fact clause operates to contractually obligate the Principal to disclose material facts to the Agent.
There are three versions of the new Material Fact clause, one each for:
Please click on the links above to view each clause and find out which REINSW agency agreements each is applicable to.
Where members have existing stocks of hardcopy REINSW agency agreement, an Annexure setting out the applicable Material Fact clause may be attached. In order to attach the Annexure, please follow the steps as set out:
- Download a copy of the applicable Material Fact clause Annexure using one of the links above.
- Print out the Annexure.
- Insert the relevant details in the spaces provided at the top of the Annexure, including:
- the title of the particular agency agreement (for example, Auction Agency Agreement, Management Agency Agreement, Sole Agency Agreement, etc);
- the name of the Principal(s);
- the name of the Agent; and
- the date of the Annexure.
- Sign the Annexure. All parties to the agency agreement must sign the Annexure.
- Attach the Annexure to the completed agency agreement.
The Material Fact annexures are only to be used as annexures to REINSW agency agreements. Copyright is held by REINSW and any unauthorised reproduction in whole or in part is an infringement of copyright.
eForms
From mid-December, the Material Fact clause will appear in REINSW agency agreement eForms.
If members have questions, or would like further information, please contact the member-only REINSW Practice Support Hotline on (02) 9264 2343.
If you are interested in REINSW Membership, please call (02) 9264 2343.
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