REAA requires agent to disclose ultimate purchaser identity

August 5, 2015

in Property

iStock_000060122596_SmallIn July 2014 the Real Estate Agents Authority (“REAA”) Complaints Assessment Committee found two Real Estate Agents had engaged in unsatisfactory conduct for failing to disclose to their Vendor client the true identity of the Purchaser of a property in circumstances when they had been instructed very expressly by the named Purchaser not to disclose the identify of the proposed nominee.

The REAA Complaints Assessment Committee found that the Agent’s duty to their Vendor client, and in the absence of a specific confidentiality agreement with the Agent’s personally, they were obliged to disclose the identity of the ultimate purchaser.

This duty to the Agent’s client required them to also disclose that the sale may not proceed if the identity of the Purchaser was disclosed. The basis for the finding was that the Vendor may have negotiated a different price for the sale if they were aware of the true identity of the Purchaser.

The lesson to be taken from this decision is that Purchasers should not disclose to Agents who may become the nominated party on settlement otherwise the Vendor will be entitled to have their Agent disclose the identify of that party.

This decision raises many issues of privacy and confidentiality however the Complaints Assessment Committee considered the duty to the Vendor to act in good faith and deal fairly with all parties (Rule 6.2) and not to mislead a client (Rule 6.4) of the Client Care Rules of the Real Estate Agents Act prevail in these situations.

Clearly it is critical therefore for the Purchaser to be very discreet in their dealings with Agents as to what is disclosed in this regard. Often the public are not aware of the legal duties on Agents which do not allow matters to always be kept confidential.

We are happy to discuss this further and provide any Agent, Vendor or Purchaser with our expert advice in this area. If you require our legal assistance please contact the lawyer in our firm who normally advises you, or alternatively contact:

Michael Nidd
03 477 8870 or 09 379 0055


The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.

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