Friday 29th April 2022 from 9am

Wills & Estates Senior Associate Debbie Sage will join Robyn Hyland to talk about the importance of planning for end-of-life care and what options are available.

What does a real estate agent need to disclose when selling a property?


Does a real estate agent have a duty to notify a prospective buyer of any dark history associated with a property? Attwood Marshall Lawyers Commercial Litigation Senior Associate Georgia Taylor discusses real estate agents’ disclosure obligations to prospective buyers and the ramifications of sellers and their agents omitting essential information to secure a sale.

While most buyers do their due diligence when purchasing a property, the onus to uncover facts about a property is not solely theirs.

Sellers and agents are also responsible for disclosing material facts to prospective buyers that may affect their decision to purchase the property.

If an agent or seller has failed to comply with that obligation, the buyer can sometimes terminate the contract. Terminating that contract can lead to losses for all parties involved and possibly litigation. Agents also face penalties from their regulators.

What is a real estate agent required to disclose?

Obligations for agents differ from state to state:

New South Wales:

Section 52 of the Property and Stock Agents Act 2002 (NSW) states that an agent must not make any statement, representation or promise that is false, misleading or deceptive (whether the agent knows or not). It must disclose a material fact that is described by the regulations.

Section 60 of the Property and Stock Agents Regulation 2002 (NSW) sets out the following prescribed material facts that must be disclosed by an agent in respect of a property:

  • within the last five years, the property has been subject to flooding from a natural weather event or bushfire,
  • the property is subject to significant health or safety risks,
  • the property is listed on the register of residential premises that contain loose-fill asbestos insulation required to be maintained under the Home Building Act 1989, Part 8, Division 1A,
  • within the last five years, the property was the scene of a crime of murder or manslaughter,
  • within the last two years, the property has been used for the manufacture, cultivation or supply of a prohibited drug or prohibited plant within the meaning of the Drug Misuse and Trafficking Act 1985,
  • the property, or part of, is a building that contains external combustible cladding – to which there is a notice of intention to issue a fire safety order or a fire safety order has been issued, requiring rectification of the building regarding the external combustible cladding. Or to which there is a notice of intention to issue a building product rectification order, or a building product rectification order has been issued requiring rectification of the building regarding external combustible cladding,
  • the property, or part of, is a building where a development application or complying development certificate application has been lodged under the Environmental Planning and Assessment Act 1979 for rectification of the building regarding external combustible cladding,
  • one or more of the following orders, within the meaning of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020, is in force in relation to the property:
    • a building work rectification order,
    • a prohibition order,
    • a stop work order.


Unlike NSW, in Queensland, there is minimal legislative guidance on what a real estate agent must disclose. The standard REQ contacts do stipulate the requirement to disclose:

  • If there is a compliant pool safety certificate,
  • If the smoke alarms are compliant,
  • If there are any outstanding neighbourhood disputes lodged (such as fence line or tree disputes),
  • Any encumbrances affecting the property,
  • If the property is registered on the contaminated land register.

Real estate agents must still comply with statutory and common law duties not to make false or misleading statements regarding a property. Such statements (whether known to be false or misleading or not) can lead to civil penalties being imposed under the Australian Consumer Law (ACL) and the Property Occupations Act 2014.

This list is not exhaustive, and most material facts that must be disclosed are set out within a standard REIQ contract or a NSW Fair Trading contract. There is an obligation for the seller and agent to disclose in writing any ‘material facts’ in those contracts.

Real estate agents and sellers should carefully consider if a material fact exists to avoid making false and misleading statements and disclose all relevant information to prospective buyers.

If you are unsure whether to disclose certain information about a property, you should always seek legal advice immediately.

If an agent fails to disclose a material fact to a prospective buyer that, when revealed, would have discouraged them from purchasing the property, the Court can, on the buyer’s application, set aside the contract and award damages in favour of the buyer. Agents can also be prosecuted for breaching consumer protection laws.

A defining case

In 2001, a violent murder occurred in a North-Western Sydney home, where a 20-year-old man killed his father, mother, and sister. He was allegedly seeking to inherit their estate once they were gone.

The killer tried to cover up his acts, sticking to a fabricated alibi. However, he was eventually found guilty and sentenced to life in jail in 2004. He has since mounted several appeals, but none have been successful.

When the family house was on the market, prospective buyers jumped at the chance to secure their dream home. The agents involved did not disclose the property’s dark past.

Upon the buyers’ learning of the property’s history, the seller had to reimburse the buyers their deposit and terminate the contract. The NSW Office of Fair Trading later fined the agents for ‘misleading behaviour in promoting the property for sale,’ in breach of the Property Stock and Business Agents Act 2002 No 66 and the Fair Trading Act 1987 No 68.

An individual aware of the property’s history eventually bought the property for a significantly lower price.

In response to this case, the NSW Government further legislated disclosure requirements in respect of situations where a murder has occurred at a property that is listed for sale.

Other required disclosures – QLD law is catching up

In Queensland, disclosure rules are currently being overhauled to put more onus on a seller to be upfront about the condition and history of the property. The idea is to ensure buyers are as informed as possible as they weigh up a transaction and bring disclosure rules in line with neighbouring NSW.

The Property Bill 2023 was created in response to the 19 recommendations tabled by QUT’s Commercial and Property Law Research Centre in 2017 after the university found a long list of inefficiencies in the current system.

Real estate agents should closely follow the passage of the Property Bill and the implementation of the new disclosure requirements, as it will change how contracts are prepared.

Queensland has been slow to set up a formal seller disclosure regime compared to other states. Until now, Queensland has required sellers and agents to comply with a mix of common law and statutory and contractual obligations instead – often with different requirements and formats. The introduction of a single legislative reference point is long overdue.

Attwood Marshall Lawyers – experts in resolving property disputes

Attwood Marshall Lawyers’ dispute resolution and litigation team is skilled at providing the best advice for anyone impacted by another party breaching disclosure obligations, including under the Australian Consumer Law. When property disputes arise, we resolve matters as quickly and effectively as possible to reduce the risk of costly and lengthy litigation, allowing all parties involved to move on with their lives.

If you are a real estate agent or a seller and are unsure of any circumstances under which you should disclose information to prospective buyers, please contact our team to discuss your obligations. If you have recently purchased a property and believe the agent failed to disclose imperative information, we are here to help you determine where you stand and what action you can take.

Contact our Commercial Litigation Department Manager, Amanda Heather, on direct line (07) 5506 8245, email or call 1800 621 071 to find out where you stand.

Attwood Marshall Lawyers also has an expert Property and Commercial team with comprehensive experience helping real estate agents and home buyers. Please call 1800 621 071 to discuss a property transaction or our conveyancing services.

Share this article

Georgia Taylor - Senior Associate - Commercial Litigation, Racing & Equine Law

Georgia Taylor

Senior Associate
Commercial Litigation, Racing & Equine Law

Contact the author

The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice and is of a general nature only. Readers should seek legal advice about their specific circumstances. 

Brisbane Employment Law

Employment Law Sydney

Gold Coast Employment Law

Defamation Law

Employment Law

Download a Brochure

Please enter your details below and
a link will be emailed to you
Download Form

Compensation Law

Select your state