The Commissioner of Consumer and Business Services has issued an important alert about the risk of defective Form 1s in South Australia where real estate agents have the wrong person signing Part D Certificate of vendor statements.
What are the consequences of not providing an accurate Form 1?
Defective Form 1s can be extremely costly to agents and vendors by giving purchasers the potential ability to “cool off” at any time up until settlement. This goes well beyond the statutory two-day period.
This can create a significant risk to agencies because the purchaser may apply to have the contract set aside and may be awarded remedy or damages.
The Commissioner has set out a very clear interpretation of the regulations, including clarity about how you can avoid defective Form 1s in South Australia. At Eckermanns, we do this by having an agreement that all agents can sign which allows us to sign Part D of the Form 1. Read on to learn more or speak to our experienced team of conveyancers if you have any questions.
- Who should sign the Form 1 Part D Certificate?
- Preparing Part D Certificates to avoid defective Form 1s in South Australia
Who should sign the Form 1 Part D Certificate?
In his update, the Commissioner of Consumer and Business Services is clear on who should and should not be signing the Part D Certificate in order to avoid a defective Form 1 in South Australia.
The Commissioner has been clear on two points. Firstly, real estate agents are the ones who should certify Part D Certificates. And secondly that agents should authorise a third party like Eckermann Forms to sign on their behalf.
The key details of the Commissioner’s update are as follows.
The Part D certificate of the Form 1 Vendor’s Statement requires a land agent to certify that the responses to the inquiries made are pursuant to section 9 of the Land and Business (Sale and Conveyancing) Act 1994 (LABSAC Act). Land agents must also confirm the completeness and accuracy of the particulars set out in the schedule to the statement.
The problem is that many agents are advising vendors to authorise their conveyancer or lawyer to prepare the Form 1 and are mistakenly then also asking the conveyancer or lawyer to sign Part D on the agent’s behalf.
Unless there is an agreement between the agent and the Form 1 preparer, this is the wrong person signing the Part D Certificate. This may result in a defective Form 1 and could also potentially lead to disciplinary action.
Preparing Part D Certificates to avoid defective Form 1s in South Australia
Through our sister company, Eckermann Forms, we prepare property forms for real estate agents every day. Our strict protocols ensure the real estate agents we work with are following the letter and the spirit of the law. From the day we started, we have always made sure we have a direct agreement in place with agents before we prepare Form 1s for them.
This is precisely what the Commissioner is calling for and Eckermanns already have it covered. Our position has always been that if there is no direct agreement with the Agent, then the Form 1 preparer cannot sign Part D, whether or not they are acting for the vendor in the conveyancing.
Whether you’re a real estate agent or selling a property privately, Eckermanns is here to help. Our expert Form 1 team is here to answer any and all of your questions. You can also trust our conveyancers to guide you through the steps and process of selling a house.