What is a Material Fact in Real Estate?

When buying properties in Melbourne and Australia, doing your due diligence is important. This is to prevent you from being caught out by surprises. One of the due diligence will include understanding the "material facts" which can influence your buying decision. Doing it properly, can save you from any nasty (and expensive) surprises. In this article, we will discuss what a "material fact" is, what it includes and why they are important in your real estate buying decisions.

What is a Material Fact in Real Estate?

A material fact in real estate is any information that can affect a reasonable person's decision to buy, sell, or rent a property, and / or the price they would be willing to pay. Sellers and their sales agents have a legal and ethical obligation to disclose these material facts, which can include significant property defects such as structural issues and / or pest or termites infestations, environmental risks such as flooding or bushfire history, and even details about past violent crimes, death on-site or drug use on the property, etc. In Victoria, vendors and their agents have a legal duty to proactively disclose known material facts—not just when you ask.

Why Material Fact Disclosure Matters in Melbourne and Victoria.

In Melbourne and Victoria, Buyers are protected by 2 disclosure frameworks. These two frameworks forms the backbone of the need for disclosure, and though penalties apply if these aren't fulfilled:

1. Victorian rules on material facts. Consumer Affairs Victoria (CAV) issues guidelines explaining what a material fact is and when agents/vendors must disclose it. The duty is proactive once a buyer indicates interest, and concealing a material fact is an offence. - Consumer Affairs Victoria

2. Australian Consumer Law (ACL). All agents and vendors must avoid misleading or deceptive conduct in trade or commerce (ACL s.18). Even if a fact isn’t on a list, omitting it can still be misleading in context. - Australian Contract Law

What is Considered a Material Fact in Real Estate?

A material fact is contextual. It depends on the property, market and what a reasonable buyer would care about when they are deciding if they should buy the property. CAV’s guidance and common practice include examples such as:

• Structural problems or significant defects: subsidence, major water ingress, termite damage, non-compliant or unapproved works.

• Orders, notices or legal issues: building notices, council orders, outstanding compliance, unregistered easements. - Legalfinda

• Safety and cladding risks, asbestos or contamination (including history of meth labs).

• Natural hazard and environmental risks: flooding risk, bushfire risk, overland water flow, landslip.

• Neighbourhood or external impacts: planned road widening, rezoning, or developments likely to materially affect value.

• Stigma/“history” where relevant: serious crimes, deaths or events that a reasonable buyer or buyer agent would likely treat as important.

Key point: There’s no exhaustive list. The Material Fact guidelines are probably intentionally designed this way. If a fact would likely influence a reasonable buyer’s decision or price, it should be treat as material. - Consumer Affairs Victoria

Material Fact vs Section 32 (Vendor’s Statement)

In Melbourne and Victoria, the Section 32 sets out prescribed information (title, rates, easements, notices, etc.). In Victoria, these property related information are disclosed in the Section 32, which accompanies the Contract of Sales. But not every material fact appears in Section 32, and a “clean” Section 32 does not excuse an agent from disclosing other important issues. Think of it this way:

• Section 32 = mandated disclosures under the Sale of Land Act (Vic)

• Material facts = everything else the vendor and sale agent knows, that is not mandated in Section 32, that a reasonable buyer would want to know. EG, structural and / or termites issues.

If a Vendor Statement and disclosure is incomplete or misleading, buyers may have rights to rescind or claim damages. Speak to your lawyer the moment you discover issues.

When Must Agents Disclose the Material Facts?

Under CAV’s guidelines, vendors and sales agents must disclose all known material facts as soon as a buyer shows genuine interest (e.g., requests a contract or Section 32, books a second inspection). Knowingly concealing a material fact can attract penalties, and in some circumstances criminal sanctions.

Agents also must not mislead by silence under the ACL. Not being asked the question is not a valid reason for not disclosing a material fact. If the overall impression would likely mislead without a key fact, they should disclose it. - Australian Contract Law

Case study: Structural Issue Affecting a Property Being Sold in Melbourne

Take this very common example. The sales agent knew about a structural issue affected the property they were selling in Melbourne. This could be a disclosure from the owner or a problem discovered by due diligence conducted by the buyers agents.

Should they disclose it to all subsequent buyers? Yes they have to. It is not an option. But...

How do most agents and owners handle Material Disclosures?

Most will keep that under wraps until asked. And even when asked, they might disclose something else minor, hoping you will trust them and let your guard down. We often come across such practices across Melbourne. We'll discuss some recent examples our buyers advocates came across and how we help our buyers avoid issues.

Case 1: The Leaning Townhouse of Forest Hill

We came across this townhouse in Melbourne eastern suburb of Forest Hill. The agent presented the property as "about to be sold", leaving us with little time to organise a formal inspection. This sales agent appears honest and helpful when asked if there are any structural issues with the property. He said someone else had done a inspection and the roof was flagged as leaking, which the vendor will fixing before settlement. However, our buyers advocates picked up something not quite right about the property during inspection. And the agent's non verbal body language seems "off" when asked about the structural issue.

We made our offer, subject to further due diligence. The agent wasn't happy, but we stood our ground. We're here to protect our buyers, not make a quick purchase, unlike other agencies who benchmark their agents.

Our independent inspection showed the townhouse was leaning at an angle, and that explained the grabbing doors. We withdrew our offer and the agent was too keen for us to confirm our withdrawal in writing. He's got a 2nd buyer in line to buy it. Good luck to them. He's probably told them our "finance fell through".

Case 2: Timber Failure in Ringwood

This probably has safety concerns. Another purchase in Ringwood, Melbourne, show a failed roof truff. The timber support truss had failed and broke, in this property which our buyers were interested in. This is pretty dangerous as there are signs other structure is compensating for the broken truss. We submitted our finding to the agents and owners and withdrew our offer immediately. The agent knew about the roof failure and were still marketing the property without that disclosure being upfront for a few more weeks. It was subsequently withdrawn from the market.

Case 3: Wavey House in Ringwood

Stumping and foundation issues were rather easy to spot. While they might sound concerning, most aren't expensive to fix and isn't as bad as it looks. However, this particular weatherboard house in Ringwood was quite major. There were stumping across several spots and it would be costly. This was flagged as a structural issue to the agent, and we walked away.

In this particular case, just because there is a structural issue, does not mean it will affect all buyers. Developers would not mind these material disclosures as they would be demolishing it and rebuilding anyway.

So, the same material fact may affect one group of buyers but might not be applicable to the other.

The tenants are still living in there, and were at serious risks of roof failure.

Does the same material fact affect every buyer?

Short answer is no. Case 3 above explained this. But that is not a valid reason for failure to disclose the material fact.

Common Examples in the Melbourne Context

Some examples which can happen in buying properties in Melbourne includes:

• A charming period home in a flood overlay—recent overland flow through the yard after storms = material.

• A townhouse with unapproved deck—no final sign-off; council notice pending = material.

• High-rise with combustible cladding rectification—special levy scheduled = material.

• A home used as a clandestine drug lab—even after remediation, the history may be material, especially if a buyer asks.

• Next door development approved—overshadowing and privacy impact = material to many buyers.

• Deaths on property—both natural and otherwise = material to many buyers.

The same fact may be material some buyers, while it may not bother others. Remember the the definition is contextual to the property and buyer. Consider these examples :

• Building structural defect. While most buyers would be concerned with structural defects and termite infestations, this may not be material to developers, as they intend to redeveloped it anyway.

• Drug labs, death on site. While this might not be material to developers, more sensitive buyers might be concerned with past history, so, the developer of the new property has the duty to disclose this when they are selling their newly built property.

• House with overlays. Such overlays would usually not affect home buyers. However if the buyer intends to redevelop or renovate the property, the vendor and sales agent have the duty to disclose the overlays, even if this may change their buying decision.

  
  

How Buyers Should Protect Themselves

1. Ask direct, written questions.

Email the listing agent: “Are there any material facts we should know about—structural, legal, environmental, historical, or otherwise, that could affect value or our decision to buy?” Keep the written trail.

2. Request evidence.

If the agent makes assurances (e.g., “works are approved”), ask for permits, final inspections, or engineer’s reports. Something that was "built more than 7 years ago" doesn't remove the need for permits, even though the sales agent and vendor do not need to produce the permits in the Victorian Section 32. Permits in such cases are more about ensuring the new structure are built to the prevailing building code, ensuring safety and integrity of the structures.

3. Run your due diligence.

Do your own building and pest inspections, council planning searches, flood and bushfire maps, owners corporation minutes & budgets, and title searches. We can never rely on the completeness of the material disclosures from vendors and sales agents. From experience, even when agents have the obligations to disclose all material facts, reassurances from sales agents are worth nothing. Things to get "forgotten", "missed" or they might "not be aware" of.

4. Escalate early.

If something feels off, ask your conveyancer / solicitor to review the contract and Section 32 before you bid or sign.

5. Use professionals.

If you are unfamiliar with Section 32, local Victoria / Melbourne based buyers advocates can help identify concerns in the disclosures (e.g., incomplete Section 32, suspicious renovations, strata underfunding) and push sales agents for disclosure, saving you time, money and stress.

What if a Material Fact was Not Disclosed?

If you learn about a material issue after signing:

• Seek legal advice immediately. This is where having the settlement done by a solicitors would excel over conveyancers. Solicitors would be able to escalate this immediately, without the need to engage a third party.

• Depending on the situation, you may be able to rescind the contract, seek damages, or negotiate price / terms before settlement. Courts have ordered strong remedies where omissions materially affected a buyer’s decision. - Legalfinda

  
  

Depending on the situation and timing, you might be able to rescind and walk away without penalties. Our clients had been able to walk away without penalties with our interventions, eg, a recent building inspections showed a townhouse complex of 10 units is tilting.

Buyer’s Quick Checklist (print this)

• □ Ask, in writing: “Any known material facts?”

• □ Review Section 32 & contract with your conveyancer.

• □ Order building & pest (and specialist reports if needed).

• □ Check overlays & hazards (flood/bushfire; council plans).

• □ For strata: obtain OC minutes, budgets, levies, insurance.

• □ Confirm approvals for renovations/additions (final sign-off).

• □ Document everything (email trail).

How a Melbourne buyers advocate helps

At Concierge Buyers Advocates, we combine street-level experience with forensic due diligence to uncover material facts before you commit. Our builder trained buyers advocates spots glaring issues during our initial assessment of the property during onsite inspections, and review Section 32 disclosures, check overlays and pressure-test agent claims against evidence. When something doesn’t stack up, we flag it—and either adjust price / terms or walk you away.

Because our builder-trained buyers advocates can spot and identify concerns and issues early in the process, our clients are able to save significant time and costs from further opinion by professionals.

Buying in 2025 and 2026? Get an independent second opinion before you bid or buy. We’ll help you avoid overpaying, avoid surprises, and buy with confidence.

Sources

• Consumer Affairs Victoria, Preparing to sell your property – Material Fact Guidelines (definition & duty to disclose). - Consumer Affairs Victoria

• Sale of Land Act (Vic) updates and material fact disclosure obligations (penalties & proactive disclosure). - Burke Lawyers

• Australian Consumer Law s.18 – misleading or deceptive conduct (applies to real estate). - Australian Contract Law

• Section 32 (Vendor’s Statement) obligations (rescission if inadequate). - elaminelaw.com.au

Disclaimer:

Information provided here and anywhere in our website is general information only, and should not be taken as financial or legal advice. It does not take your personal circumstances, needs and requirements, etc, into consideration. You should always seek formal legal and financial advice for solutions to suit your individual circumstances.