Selling my property: what information do I need to disclose?

So, you’ve marketed your property, garnered interest from prospective buyers, negotiated a deal with a buyer, and you’re now ready to prepare a contract. What next?

Well, one point to consider is whether you’ve met your pre-contractual disclosure obligations before signing the contract.

What are pre-contractual disclosure obligations?

Under the common law, sellers are required to disclose defects in title to prospective buyers.

Such defects in title can include easements, covenants and leases. If you fail to disclose such issues to a buyer then you can be sued for damages arising out of such non-disclosure, or the contract can even be terminated.

Under the common law, sellers are required to disclose defects in title to prospective buyers.

On top of this, there are a number of pieces of legislation that impose disclosure obligations upon sellers.

The difficulty, however, is that the legislation is different from state to state, and even within a state there may be a number of pieces of legislation that have to be considered.

If a lot is being sold off-the-plan (such as a lot on a plan of sub-division not yet registered with the Titles Office) then there are additional and extensive disclosure requirements.

If the property is in a body corporate or strata title scheme, you may have further disclosure requirements and even the need for implied statutory warranties.

Buyers should be aware that the seller’s disclosure obligations do not detract from the importance of conducting searches and enquiries prior to entering into the contract.

The seller’s disclosure obligations do not detract from the importance of conducting searches and enquiries before signing a contract.

It’s always best to be aware of such issues before signing the contract rather than trying to resolve them after you’ve signed.

If a seller doesn’t comply with the legislative disclosure requirements then there can be a number of potential consequences.

These include the seller being sued for damages, the contract being terminated, or the seller and/or their selling agent being fined for non-compliance.

It’s therefore very important that you obtain appropriate legal advice in the preparation and execution of your contract, to ensure you comply with all of your disclosure obligations.

The information within this article is provided for your general interest and should not be relied upon as a substitute for legal advice.