Seller disclosure for buyers

Most of the information in the seller disclosure documents is straightforward, but some of the information is more complex. For example:

• if there is a registered easement affecting the property, a solicitor can explain the nature of the easement to the buyer and how it might affect their use of the property.  The owner of the property might also have obligations to contribute to the cost of maintaining infrastructure on the property.
• if there is an unregistered encumbrance affecting the property, a solicitor can explain what impact this has and how a third party might have rights to access to the property, including to maintain infrastructure.
• if the property has been subject to a residential tenancy agreement in the past 12 months, there are restrictions on when rent for the premises can be increased

This type of information is of value to a buyer.  These issues affect how the buyer can use or enjoy the property.  The information disclosed might also be relevant to plans the buyer has to rent the property or to improve the property in some way. 

The information in the seller disclosure documents reflects existing statutory obligations such as owner-builder works, disputes about trees, providing pool safety certificates or information about whether the property is on the contaminated land register.  The requirements also reflect warranties that a seller has been giving under the standard sale of land contracts for many years (e.g. title encumbrances, whether there is a proposed resumption affecting the property). The new process simply consolidates the obligations in one place. 

The seller disclosure documents do not include all of the information a buyer might need. Buyers still need to speak to their solicitor about other searches to be done after the buyer signs the contract.  Their solicitor can explain the type of information available by search and explain the results, to help their client understand the impact of any search results on the property they are buying.

The seller disclosure documents do not include all of the information a buyer might need about the property. 

For example, the Form 2 does not include information about flooding or other natural hazard history, structural soundness of the building or pest infestation, current or past building or development approvals for the property or whether there is asbestos in the buildings on the property. 

Before signing the contract, a buyer should speak to their solicitor about whether they wish to make the contract subject to a building and pest inspection.  Their solicitor might also recommend other special conditions, depending on the buyer’s needs or concerns about the property. 

After signing the contract, a buyer still needs to work with their solicitor about other searches to be done, for example, to check building approvals or planning restrictions.  Their solicitor can explain the type of information available by search and explain the results, to help their buyer understand the impact of any search results on the property.

Once the buyer and seller have signed the contract, there is a legally binding agreement in place for the sale of the property.

The contract might be subject to conditions, like obtaining finance approval for a loan or the buyer undertaking a building a best inspection.  But once the contract is signed by all parties, there are only limited opportunities to terminate the contract.

One of those opportunities might be available if the seller disclosure documents given to the buyer are incomplete or inaccurate.  The buyer’s solicitor can advise their buyer client if there are concerns with the documents and whether the buyer has any contract termination rights as a result.

If a buyer did not obtain legal advice before signing the contract, it is critical the buyer speaks to a solicitor as soon as possible after a contract is signed.  There are important steps a solicitor will take to protect a buyer’s interests during a conveyance and these can take time.  Some of those steps might involve further searches about the property, which take time to complete.  Early legal advice will help a buyer throughout the conveyancing process.