What is considered too much or too little information, and how do you ensure you provide the right information? There are 5 general items that you need to disclose when you sell your property.
Pre-contractual disclosure obligations
It is a seller’s obligation to disclose all relevant information that may be considered a limitation, restriction or “burden” on the land. These can include:
- Easements – a section of land accessible by the council (or other authorities) for essential services (e.g. maintaining gas pipes). Landowners commonly are prevented from building anything of a permanent nature over the easement.
- Encumbrances – a claim or interest formally registered by a third-party on the land. These commonly include a mortgage, easement or covenant.
- Leases – a residential tenancy agreement which indicates that a buyer may not be entitled to vacant possession of the property (i.e. “move in”) on the settlement day.
- Zoning – regulatory overlays determined by the local council that affects the land which the property is situated.
Regulations on these disclosures differ state by state in Australia.
Sellers must provide documentation regarding any building works or developments to the land or property that was completed within a certain period. These provide clarity to when works have been approved, completed, and most importantly, compliant with building regulations.
Sellers are legally obligated to disclose any known defects of a property, especially if the damages on the building are structural and/or if the land is infested by pests. However, Building and Pest reports are usually arranged by buyers as a pre-purchase inspection or added in as a condition to the contract of sale.
Properties that have been cited with troublesome events may be difficult to sell as it can affect the value of the property. Nevertheless, it is mandatory for sellers and agents to disclose sensitive issues, such as deaths, crimes, or accidents. Also, if the land used to be a graveyard, landfill etc., it must be disclosed.
In most states, disclosure of asbestos is mandatory as it has been banned in Australia since Dec 2003. If damaged or exposed, it may cause major health issues if inhaled for a long period of time. This is often disclosed for properties in apartment buildings.
What happen if I don’t disclose what is required?
If you hide or hold back obligatory information, you will risk penalties and fines.. If you find yourself feeling uncertain about disclosures, talk to your conveyancer or solicitor.
How can W Legal Group help?
Are you looking to sell your property and need a contract drawn up? Contact us today and we can help you with your contract of sale!