All property transactions in South Australia require the seller to provide the purchaser with a Form 1 – the primary source of disclosure. This means we see some curious questions in regards to what you must disclose when selling a house? House sales in South Australia are booming, and our team of expert conveyancers are here to help you across all areas of buying or selling a property. So, whether you’re eager to finalise the sale of your listed property, or you’ve made an offer to purchase the home of your dreams and are excited to sign the contract and move into the cooling-off phase, you can’t do this in South Australia without coming into contact with a document known as the Form 1 (or vendors statement).
Overview:
- What must you disclose when selling a house?
- What is a seller obligated to disclose?
- Do the activities of past owners or occupiers need to be disclosed?
- What happens if a seller does not disclose?
- What are the legal requirements when selling a house?
What must you disclose when selling a house?
What do you have to disclose if selling a house? When selling a home, it’s important to understand that there are certain pieces of information that can impact the value of the house. A Form 1 is a statutory disclosure statement that the vendor (seller of land) is required to give to the purchaser. The Form 1 contains a lot of information, including:
- Seller and purchaser details
- What cooling off rights the purchaser has
- Details of any matters that might affect the property, such as:
- Encumbrances
- Mortgages
- Council zoning
This information is collated from the State Government, local council, strata / community title managers (if applicable) and the vendor.
What is a seller obligated to disclose?
No matter what type of property they are selling, the vendor will be asked a comprehensive list of questions by the Form 1 preparer (this is typically a real estate agent or a Form 1 specialist such as an Eckermann Property Forms team member). This is to determine information about the property that cannot be obtained by government or council searches. These answers, together with the required statutory search responses, will enable completion of the Form 1, and are a crucial element in meeting your obligations when it comes to disclosure.
Even though it is the responsibility of the real estate agent (or vendor if not using an agent) to prepare or engage a professional to prepare the Form 1, a vendor needs to ensure that they disclose the correct information so that the Form 1 is accurate. As a vendor, it is an offence to fail to give the purchaser a complete and accurate Form 1, subject to some limited exceptions. This is why it is crucial to engage professional assistance to guide you on what you must disclose when selling a house.
If you are a purchaser, it is important to look carefully at the information that has been disclosed. If you are not regularly involved in the sale and transfer of property, you might not capture the full meaning of some of the terms that can appear, so it is recommended that you have your conveyancer on hand at this important stage to check over it for you, particularly to ensure that you will be able to use the property for the purposes you intend to use it for.
What must I be aware of when buying a property?
It is the responsibility of the purchasers to make sure that they are happy with the condition of the property they are purchasing – including that any buildings or structures on the property are structurally sound or free of serious pest or other damage. This is why we are strong advocates of getting quality building and pest inspections during the cooling off period or prior to an auction. Competent building inspectors who follow the Australian Standard, will apply special techniques to ‘see things’ most of us would miss and these oversights can potentially cost a large amount of money to rectify.
Do the activities of past owners or occupiers need to be disclosed?
Some buyers may be sensitive to knowing whether certain activities or events have taken place on a property or in a house. However, it depends on what these events or activities were, as to whether there is the requirement for a vendor to disclose them (if, of course, they are in fact aware of their occurrence).
What happens if a seller does not disclose?
If a vendor deliberately tries to hide a known defect, such as concealing serious white ant damage or structural issues, the purchaser could have recourse to lodge a claim for financial damages after settlement. This is also the case if the vendor provides deliberate false information to questions from a purchaser about the property. However, in these situations, the purchaser would likely need to be able to prove that the vendor was deliberately misleading or deceptive in their actions.
What are the legal requirements when selling a house?
If a property was tenanted before sale, a landlord now selling a property, for example, may not have full knowledge of the events which may have taken place in the home while it was tenanted. However, if for example, it was discovered that tenants ran a drug lab on the property, the owner would be legally obligated to disclose this in the Form 1 under the section which covers particulars relating to environmental protection.
Additionally, there are no legal requirements in South Australia to disclose whether someone has died or even been murdered in the property. The main issue around this type of disclosure being legally enforced revolves around how far any duty of disclosure would reach. Someone who has owned a property for the last ten or so years, for example, couldn’t realistically be expected to know about a death or upsetting event which took place in the property prior to their ownership. However, if a purchaser asks the agent or the vendor if they are aware of something like this occurring on the property then the vendor should not withhold any knowledge they might have of these types of events.
Eckermanns can help you with your disclosure questions
With over 40 years in the industry, our team of experts know the ins and outs of selling a home and have you covered for everything from private sale contracts to residential land subdivision. The earlier we are engaged in the process of buying or selling property, the more we can do to ensure the process of transferring a property is as smooth as possible or to allow us to help iron out any bumps or creases we come across along the way. Contact the team at Eckermanns on 08 8366 7900 for any assistance.
