A luxury home listing in South Australia has sparked fresh scrutiny of real estate agents’ responsibilities after the state’s consumer watchdog warned agents could face consequences if they knowingly fail to disclose serious property issues.
The warning follows complaints from Adelaide homeowners Rimple and Preet Sharma, who purchased a newly built property for more than $800,000 and later discovered what they described as a growing list of serious defects. Reported problems included leaking pipes, crooked door frames, holes in cabinetry, ventilation systems that led nowhere, drainage concerns and poor workmanship across parts of the home.
The situation became more serious after a building report allegedly recommended demolition of the property because of the scale of the defects identified.
The home had been marketed as a premium residence, with promotional material describing it as “masterfully constructed” and highlighting “precision craftsmanship,” “innovative design” and “long-lasting durability.” The listing also stated the property came with a full builder’s warranty and compliance documentation.
Watchdog warns agents have legal obligations
South Australian Consumer and Business Services Commissioner Brett Humphrey said real estate agents could potentially face scrutiny if it was proven they knew a builder lacked required approvals or other important information relating to the property.
Under South Australian law, making false or misleading representations to encourage someone to purchase land can attract penalties of up to $20,000 or one year imprisonment. Authorities also note that incomplete or incorrect Form 1 Vendor Statements can lead to fines and legal action.
Documents viewed by media outlets reportedly showed the Form 1 for the Sharma property described the home as owner-built, while sections relating to insurance were left blank. After settlement, the family requested building indemnity insurance information and were reportedly advised by the selling agent to contact the builder directly.
The Sharmas have also claimed they were prevented from attending one building inspection before settlement, with only the inspector allegedly permitted access. The agency disputes that version of events and says there were multiple communications and opportunities for inspection throughout the transaction.
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Builder fined as investigation continues
Builder and vendor Khorshed Alam has been fined $75,000 for multiple offences, including operating without a licence and carrying out building work without required building indemnity insurance on several Adelaide properties.
South Australian Consumer and Business Affairs Minister Michael Brown also issued a public warning notice concerning Alam, stating he had demonstrated a tendency to disregard important legal obligations relating to licensing and insurance requirements.
The case highlights the growing importance of due diligence in Australia’s housing market. Industry body REISA says agents must make reasonable inquiries and avoid knowingly misrepresenting a property’s condition, while buyers should always obtain independent building inspections before settlement. The warning comes as property compliance rules continue to evolve across Australia, with several new requirements affecting buyers and sellers from July 1, as explained in Australia’s new property rules taking effect from July 1.
For official guidance on consumer rights and property transactions, buyers can review resources published by South Australia Consumer and Business Services.
For buyers, the case is a reminder that polished marketing language should never replace written checks, independent inspections and clear confirmation of insurance and approvals before settlement. For agents, the message from regulators is equally clear: if serious property issues are known, transparency may not just be good practice — it may be a legal obligation.
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