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Agents silent about defects orders on units

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If you were wondering what the point of a Property Services Commissioner was – the new position having been announced this month by NSW Better Regulation Minister Kevin Anderson – look no further than reports that real estate agents are continuing to sell off-the-plan apartments without telling purchasers that the blocks have been subject to defect repair orders.

With Building Commissioner David Chandler riding roughshod over dodgy developers, and applying the blowtorch to the bellies of backsliding builders, developers of several apartment blocks have been warned they won’t receive occupation certificates unless they mend their ways (and rectify their defects).

However, according to a story in the Sydney Morning Herald, sales staff and real estate agents are still selling the units without telling purchasers, as they are legally obliged to do, that the Building Commissioner has issued orders to fix or monitor defects.

Some real estate agents involved told the SMH that they have not been told how the new laws work or where to find the orders.

“Mr Chandler has put five prohibition orders on projects across the city since December,” writes Nigel Gladstone in the SMH. “The law states that an agent is required to tell a prospective buyer about any defects they know or ought to know about.”

The story adds that agents for a project on Sydney’s upper north shore said they were unaware of the prohibition order on the property which prevents a developer from settling on any sales off the plan until defects are fixed.

Yeah, of course, it’s possible that real estate agents will somehow miss wall-to-wall coverage of one of the hottest issues in property development in NSW, if not Australia.

By the way, there is no disclosure obligation on developers unless they are selling directly to purchasers, says the SMH report.

Two Sydney projects containing a combined total of almost 1000 apartments had orders slapped on them this month and the sales may not be completed if the Building Commissioner sits on the occupancy certificate until the defects are rectified.

The article  quotes NSW Real Institute CEO Tim McKibbin saying the government “do a particularly poor job of informing agents … of their obligations when things like this change,” leaving them liable for not disclosing material issues they ought to know about.

Well yes, Tim. If they didn’t know about the defect notices and weren’t aware of any requirement to inform purchasers, they aren’t really doing their job properly, are they?

Which brings us back to the Property Services Commissioner who may well be tasked to do to the people who market, sell and manage properties what David Chandler has been doing to the entities who build them.

Tim McKibbin has been calling long and loudly for a property services commissioner – could this become a case of being careful what you wish for?

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One Reply to “Agents silent about defects orders on units”

  1. Jimmy-T says:

    If you want to start a discussion or ask a question about this, log into the Flat Chat Forum (using the Forum link on the menu at the very top of your screen). More people will read it there and you can more easily keep track of responses.

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