Principles of disclosure
When you are listing a property, it’s important to share all the necessary information with potential buyers. On this page, we outline the related rules and the steps you can take when disclosing information so you can best protect yourself.
Rule 10.7 – disclosing defects
Rule 10.7 states:
A licensee is not required to discover hidden or underlying defects in land but must disclose known defects to a customer. Where it would appear likely to a reasonably competent licensee that land may be subject to hidden or underlying defects, a licensee must either—
a) obtain confirmation from the client, supported by evidence or expert advice, that the land in question is not subject to defect; or
b) ensure that a customer is informed of any significant potential risk so that the customer can seek expert advice if the customer so chooses.
This rule involves you telling potential buyers about known problems with the property or business you are selling. It tends to relate to physical defects, for example, a leaky roof or subsidence in the land, but may also include issues like defects in the title.
You are expected to be able to identify potential issues with a property, for example, properties that fit the ‘leaky building’ stereotype or properties with suspected asbestos ceilings.
Rule 6.4 - sharing information
Rule 6.4 states:
A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client.
This rule addresses the other information you may need to share about a property that is broader than physical defects, for example, a development happening in the neighbourhood, or whether there has been a violent crime in the property.