You often read or hear in the news about neighbour disputes which, in extreme circumstances can end up causing one of the neighbours involved to sell their property. So here’s an important question to consider, is this dispute something that needs to be disclosed as a material fact when selling your property?
Well, a recent Supreme Court ruling in Western Australia may have set the precedent of disclosing a nasty neighbour when selling a property. Here we outline for you a recent case study which poses an interesting question regarding a material fact.
Material Fact
Case Study Thillagaratnam -v- Doan [2022] WASC 185 (27 May 2022)
The Vendor was clearly aware of the following:
- long history of neighbours breaching violence restraining orders, assault and disorderly behaviour relating to other lot owners;
- complaints made on the neighbour for use of extremely foul language and cursing, playing music at extreme noise levels and banging on the ceiling.
However, these material facts were not disclosed to the Purchaser and the sale documents state that:
“The seller does not know of anything which will materially affect the buyer’s use or enjoyment of the strata lot or of the common property comprised in the strata scheme.”
The buyer successfully sued the Vendor for breach of contract and fraudulent misrepresentation of the property after the parties signed the contract.
Section 12(d) of Sale of Land Amendment Act 2019 (“Act”)
Purchasers
When selling a property, the Act places the obligation on the Vendor and estate agents to disclose any material fact to a prospective purchaser.
Click here to find out exact what is meant by the term material fact.
It is important for you to obtain pre-contractual advice so that your solicitor can review the sale documents and advise you of any terms and conditions that are unfair to you and raise any potential red flags (including material facts) disclosed in the Vendors Statement such as illegal building works, building defects, cladding, water leaks etc.
However, there is no obligation for ’material facts’ to be disclosed in a Contract of Sale or Vendor’s Statement so it is also important that you make your own enquiries and carry out such due diligence to satisfy yourself. This may include, speaking to neighbours, asking the selling agent if there are any material facts of the Property and why the Vendor is selling, calling the Council to ask if there have been any complaints of the Property or neighbouring properties etc.
Vendors
If you are not certain on what you need to disclose, we recommend that you discuss any concerns you may have with your solicitor preparing the Contract of Sale and Vendor’s Statement so that your solicitor can advise you of your disclosure requirements.
Other interesting reading if you’re interested: What should be included in a Section 32 document?
Our Property & Property development lawyers have extensive experience in dealing with all aspects of property, real estate and property development law. Our team of property lawyers, including an accredited specialist have assisted many clients with their property needs including neighbour or property disputes.
If you have any questions or would like to find out how our property lawyers can assist you, please don’t hesitate to contact our office on +61 3 9822 8588.
