A land agent in SA discovers that a property they are marketing has significant structural damage not disclosed by the vendor. What is the agent's obligation?

Q: What is the correct answer to: A land agent in SA discovers that a property they are marketing has significant structural damage not disclosed by the vendor. What is the agent's obligation?

The correct answer is The agent must advise the vendor of their disclosure obligations and must not make false or misleading representations to buyers. An SA agent who discovers material defects must advise the vendor of their legal obligation to disclose and must not make false or misleading representations to buyers. The agent cannot conceal known defects, as this would breach the Australian Consumer Law and the Land Agents Act 1994.

Q: What background knowledge is needed for this Agency Practice question?

Agents in SA have obligations under both the Land Agents Act 1994 and the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010). Misleading or deceptive conduct provisions apply regardless of intent. Agents must balance vendor loyalty with legal obligations to avoid misrepresentation.

Q: What is a good way to remember the answer to this Agency Practice question?

If you KNOW about a defect, you must SHOW (disclose) it. Advise vendor to disclose, and never mislead the buyer. When facing disclosure questions, remember: knowledge creates obligation. Know it = must show it.

Q: What exam tip applies to this Agency Practice question?

Agents cannot hide known defects behind vendor responsibility. If the agent knows, they must advise the vendor to disclose AND avoid misleading buyers.

Q: How does this Agency Practice concept apply in Australian real estate practice?

An agent notices severe water damage during a property inspection. They advise the vendor in writing to disclose the damage and ensure all marketing materials do not misrepresent the property's condition to prospective buyers.

Question

Agency PracticeSAHARD

A land agent in SA discovers that a property they are marketing has significant structural damage not disclosed by the vendor. What is the agent's obligation?

Answer Options

A

The agent has no obligation as disclosure is solely the vendor's responsibility

B

The agent must advise the vendor of their disclosure obligations and must not make false or misleading representations to buyers

C

The agent should reduce the asking price without informing the buyer

D

The agent may continue marketing without disclosing as long as a building inspection clause is included