What must sellers disclose about a property?
Every property has its nuances, and occasionally it might involve something that must be disclosed to a potential buyer.
But what exactly do you need to tell your agent and buyers when it comes time to sell? Here’s a general guide to what vendors must disclose when it comes to selling their property.
A quick word to the wise
The rules around exactly what you must reveal to a buyer before they purchase your property vary from state to state, and at present some state governments are also introducing new regulations in this arena.
Meanwhile, consumer law also protects purchasers across the country.
So, while this article provides a general guide, it’s prudent to seek your own professional legal advice from your conveyancer or solicitor about what you must reveal to a potential buyer.
It’s also important to note there are fines and penalties for failing to disclose something important which might affect the value or livability of the property.
But let’s now take a look at some common areas which generally require disclosure…
Five common areas
As realestate.com.au explains, there are five common areas where sellers would need to disclose information about their property to a potential buyer.
- Limitations and restraints
Disclosed prior to the sales contract being signed, limitations and restraints relate to the way the property can be used or developed.
They include:
- Easements – which are sections of land that others have the right to use for specific purposes.
- Covenants – which are rules that apply to the property or part of it
- Leasing – where the property is subject to a rental agreement after its sale.
- Zoning – which might relate to a range of things including flood zoning, bushfire-prone areas and more.
- Building approvals
If improvements or additions have been made to your property, you may need to provide documents that indicate this work has been approved or meets specific building standards.
You may also need to reveal whether a structure on your property, such as a patio, pool, gazebo, or addition, is unapproved.
- Property defects
Although buyers should get their own pest and building inspection undertaken, in most states and territories it is expected that the seller will reveal any defects with the property.
This might include structural issues, damp, pest problems and fixtures or appliances that do not work.
- Sensitive issues
In some states and territories, the seller is required to reveal any circumstances that might not be obvious but would affect the buyer’s perception of the property.
For example, if the property was the site of a major crime such as a murder, this would need to be disclosed.
- Asbestos
Asbestos was a commonly used building material up until the 1990s in Australia, and more and more states and territories now require the seller to reveal if it is present in their property.
Honesty is the best policy
When it comes to what you should reveal to potential buyers, honesty is generally the best policy, allowing for a transparent and ethical transaction where the buyer knows exactly what they’re purchasing.
As we mentioned, the laws regarding exactly what needs to be revealed do vary from state to state, so if in doubt, it’s worth seeking advice from your legal representative.
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