With little fanfare, the New South Wales state government has
introduced new changes affecting the obligations of real estate
agents in regard to property reports and price disclosures for
agency agreements for residential property sales, and an exemption
for certain commercial property agency work. The changes commence
on 15 August 2016.
Register of reports for residential property for sale to be
made available to purchasers
Real estate agents now have the obligation to maintain a
register of various reports relating to residential properties that
are for sale (being predominantly building reports, pest reports,
and strata or community scheme reports) which must be made
available to purchasers who ask for a contract for sale.
The records must indicate the date on which the property was
inspected, details of the person requesting the report, details of
the person who prepared the report, whether the report is available
for repurchase and whether the person who prepared the report has a
professional indemnity insurance policy.
Deregulation of commercial property agency work
A real estate agent is now exempt from the operation of the Property, Stock and Business Agents Act 2002 with
respect to undertaking commercial property agency work on behalf of
an affiliate of the agent or an entity that is a significant
property owner (that is, one that has properties having a market
value of $40 million or more or an aggregate gross floor area of
20,000 m2 or more).
Price disclosures for private treaty sale of residential
Following industry consultation, if an agreement (usually an
agency agreement) provides for a residential property to be offered
for sale by way of private treaty, that agreement must specify the
price of which the property is to be offered.
Legislative changes aim for improved governance and reduced
costs for purchasers
Whilst imposing additional obligations on real estate agents, an
exemption is given and these legislative changes are logical and
obviously are part of good governance process for agents.
These measures also are aimed at reducing the costs for
purchasers whom otherwise may incur significant costs in relation
to reports on multiple properties they may be considering.
Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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