You can protect yourself from a complaint by knowing what you’re selling, understanding the relevant information, clearly communicating that information and knowing when you need to refer vendors and buyers to independent legal or technical advice.
Failure to identify and disclose leaky building
The licensee failed to advise the purchasers that:
- due to its age and construction materials, the property might be at risk of weathertightness problems
- a previous conditional agreement for sale and purchase of the property had failed to settle due to an unfavourable building report
- the previous building report had identified potential weather-tightness problems with the property.
The licensee told the Tribunal that:
- he did not consider that he needed to tell the complainants or any other buyer about the earlier building report or the fact that the sale had previously fallen through because of the building report
- he now acknowledges that he should have told the complainants about the existence of an earlier agreement for sale and purchase and the reason why it had collapsed.
You must disclose all material information
The Tribunal held that the licensee was not entitled to rely on the fact that a subsequent positive report provided by the vendor cleared the property. The licensee should have disclosed the fact that an initial building report had detected problems with the property.
We consider that he was careless and that he was not properly trained in understanding his obligations as an agent to disclose all material information, not just the information that he thought was material to the issues.
The licensee breached rules 6.4 and 6.5 of the Code of Conduct because he did not disclose all material information to prospective purchasers relating to the weathertightness of a property.
...we do consider that the Charge has been proved at the level of unsatisfactory conduct under section 72. We consider that there was a clear breach of Rule 6.4 and 6.5 and that on the basis of previous decisions and comments by the Tribunal,... the obligation is on the agent to be proactive in ensuring that potential purchasers have all necessary information.
What this means for you
The obligation is on the licensee to be proactive in ensuring that potential purchasers have all necessary information. You can’t solely rely on a positive report provided by the vendor to clear the property of your disclosure obligations.
If a building you suspect, due to its age and construction materials, might be at risk of weather-tightness problems, you need to inform buyers and advise them to seek expert or legal advice before submitting an offer.
Purchasers should be able to be sure that the information that they are given about the house by the agent represents a complete picture of the property and not selective information.
We recommend you seek advice about the effect of the Tribunal’s decision if this is a significant matter for you.