DISCLOSURE WHEN SELLING A PROPERTY

WHAT IS DISCLOSURE AND WHY IS IT IMPORTANT?

by Dominic Nguyen, September 22, 2016

When you sell a property in New South Wales, you’re required to provide a lot of documents and disclose a wide range of information to potential buyers, according to the Conveyancing Act.

If you fail to disclose any relevant information, the buyer may have the right to cancel a contract for sale of land. It is always important to comply with legislation to ensure that the contract is compliant and valid.  

PRE-CONTRACTUAL DISCLOSURE OBLIGATIONS

Under the law, you must disclose all defects or affections in title to potential buyers. These defects and affections may include road widening, compulsory acquisitions, covenants, easements, caveats and leases.

A buyer may cancel the contract for sale or may even sue for damages caused by these defects if there has been a failure to disclose them before the exchange of contracts.  

When preparing the contract for sale of land, documents that you and/or your lawyer should attach may include:

●    Title Search;
●    Any dealings identified on the title search; 
●    Sewerage diagram outlining configuration of sewage pipes;
●    Sewer connection diagram;
●    Building Over Sewer letter;
●    All restrictions, covenants and rights;
●    A Zoning Certificate from your Local Council;
●    A copy of the Deposit Plan or Strata Plan of the land;
●    A copy of any Deeds;
●    Any valid swimming certificate of compliance;
●    Tenancy Agreements.

If you’re selling an off the plan or strata property, there are even more extensive disclosure obligations.  

For example, when selling off the plan, you may be required to attach any unregistered dealings, schedule of finishes, certificates and warranties.

If it is a strata property, you will have to attach a copy of the Strata Plan and By-Laws to the contract for sale when you’re selling a strata property.

IMPLIED TERMS

In some circumstances, special terms or conditions are included in the contract for sale to protect your interest during and after the property transaction. Even so, there are some terms that are implied by law.

The objective of having these implied terms is to ensure that the property transaction is fair to both parties.

One of the most important implied term is about undisclosed encroachments which commonly relate to irregular fencing or roofing.

If you don’t disclose an encroachment in the contract for sale when you sell a property, the buyer may issue an objection or requisition and ask for clarification.

IMPLIED WARRANTIES

Most contracts for sale also contain implied warranties to ensure that the property for sale isn’t affected by any undisclosed affections.

For example, if a property is affected by a Council development, you must disclose this information to potential buyers of your property.

Failure to disclose any affections may entitle the purchaser to rescind or cancel the contract.

When selling a Sydney property, you can avoid many disputes by disclosing all the relevant information properly. If you’re not sure what you need to disclose, it is in your best interest to obtain legal advice from a Sydney property lawyer.

In most cases, if the contract for sale has been properly prepared then the disputes will be minimal during the conveyancing process.

 Words by Dominic Nguyen, Unified Lawyers. 

Unified Lawyers
Shop 1, 20-22 Station Street, Marrickville NSW 2204
PO Box 849 Marrickville NSW 2204
T 02 7902 1764 | F 02 8458 5373
W www.unifiedlawyers.com.au

DISCLAIMER: The content of this publication does not constitute legal advice and is intended only to provide a summary and general overview. We do not guarantee that it is current. You should seek specialist legal advice or other professional advice about your specific circumstances. Your access to this publication is not intended to create nor does it create a solicitor-client relationship between you and Unified Lawyers.

Return to blog ...