Recording and disclosure requirements
Real estate agents have record keeping and disclosure requirements related to pre-purchase property inspection reports. The reports are:
- a building inspection of the property
- a pest inspection of the property
- an inspection of documents about the property under section 182 of the Strata Schemes Management Act 2015
- a certificate dealing with financial matters under section 184 of the Strata Schemes Management Act 2015
- an inspection of documents about the property provided for under section 26 of the Community Land Management Act 1989.
The reports concerning strata schemes are generally known as a ‘strata search’.
They only need to provide this information when the prospective buyer asks for the sale contract for the property.
Information to record for each report
Agents must record the following details for each report:
- the date on which the inspection was conducted
- who requested the report
- who prepared the report with their business contact details
- whether the report author has professional indemnity insurance
- whether the report is available for re-purchase.
View the frequently asked questions – property inspection reports information below for practical assistance in complying with the requirements.
Penalties of up to $4,400 will apply to a corporation and up to $2,200 in any other case where there is non-compliance with these record keeping and disclosure requirements.
Record keeping requirements for property reports come under clause 33A of the Property, Stock and Business Agents Regulation 2014. Go to the property reports and commercial exemption reforms page for an overview of the 2016 amendments to the Regulation.
Frequently asked questions: Property inspection report requirements for agents
From 15 August 2016, real estate agents are required to keep records of property inspection reports, including strata or community scheme reports, of which they are aware. They must disclose that information to potential buyers when they request a copy of the sale contract.
These requirements are part of the amendments to the Property, Stock and Business Agents Regulation 2014.
What kinds of reports do agents need to record and disclose?
Any pre-purchase building inspection report (usually AS 4349), pest and termite inspection report, or an inspection of owners corporation records or a strata certificate, or an inspection of community scheme records.
How would agents know if these reports exist?
There are several ways that an agent may know if a report had been prepared. This includes:
- The vendor may tell the agent that reports had been done
- The agent could ask the vendor if there are any reports
- The vendor could ask the agent to arrange a building inspection report, a pest and timber inspection or a strata or community scheme report
- A prospective home buyer could ask the agent to arrange access for an inspection, or for access to owners corporation's or community association’s records
- On behalf of a prospective home buyer, a building inspector could ask the agent to help arrange access to a property
- On behalf of a prospective home buyer, a strata inspector could ask the agent to help arrange access to owners corporation's or community association's records.
What happens if an agent isn’t told that a report has already been prepared or completed?
The agent is only required to keep records of reports of which they are aware or that can be reasonably obtained. They would not be liable if another party withheld information about the existence of any reports, or failed to provide accurate information about them.
What does 'reasonably obtained' mean?
Agents are not be expected to make exhaustive enquires to find out if any reports have been completed. For example, agents may know about reports if they have been asked to help arrange for them, or if a vendor has provided the agent with details of competed reports.
If an agent seeks information from a vendor or an inspector but they refuse to provide it, then the agent has already made a reasonable attempt to obtain those details. Agents could consider noting any refusal by relevant parties to provide this information.
What information do agents need to record?
The records need to include (if known):
- the date of the inspection or strata search
- whether the report was requested by the vendor, the agent or a prospective home buyer
- the contact details for the inspector or company who prepared the report
- if the report is available for repurchase
- whether the author of the report has Professional Indemnity Insurance.
Must vendors, prospective buyers or other parties tell agents of any reports prepared or completed?
No, they are not obliged to provide this information.
Do agents have to keep copies of reports to give to prospective home buyers?
No, agents do not have to keep copies of any reports.
How long do agents have to retain the records of the reports?
As with other records, these records need to be kept for 3 years.
Is there a standard format for the record-keeping and providing the records to prospective buyers?
No, agents can keep and provide the records in any form they choose.
When do agents have to provide this information?
This is a once off disclosure at the point in time a prospective buyer asks for a copy of the sale contract. An agent would not have to disclose to that prospective buyer the details of any subsequent reports.
Must agents proactively disclose the records to any prospective home buyer?
If a prospective home buyer requests a copy of the contract for the sale of the property then, regardless of whether or not they request any information about reports, the agent must disclose the information recorded about the reports.
If a prospective home buyer who has not requested a copy of the sale contract asks about any reports, the agent is not obligated to provide that information, but may do so if they wish.
Are agents liable for the accuracy of the reports?
The author of the report is responsible for its content. Agents are not responsible for checking the content of the report.
Are there any penalties for failure to keep these records?
Yes, these are the same as for any other failure to comply with other record-keeping requirements - up to $4,400 for a corporation and $2,200 in any other case.