|Your legal obligation as a seller.
When selling a property, the vendor has a legal obligation to make certain information about the property, available to any potential buyer. This information is required under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994. The statement containing the information is called a 'Form 1' or 'Statement under section 7'.
The information in the Form 1 comes from various sources including the State Government, the local council and the seller of the property. Where the property is part of a strata or community scheme, information is also required from the strata corporation or community corporation.
The information set out in the Form 1 must be complete and accurate at the later of:
- the time that the Form 1 is given to the buyer; and
- the time that the contract is entered into if the Form 1 had been given at an earlier time.
The seller should be aware there are severe consequences from failing to give a Form 1 that is complete and accurate at the critical time (as set out above). The first is that you commit an offence.
The second consequence relates to the buyer's cooling off rights. The right (if any) to cool off continues until the earlier of settlement or two clear business days after getting a complete and accurate Form 1. If the Form 1 was not complete and accurate at the critical time, the situation can only be remedied prior to settlement by the service of a new complete and accurate Form 1. In situations where the Form 1 was given to the buyer before signing the contract a statement updating the Form 1 may be given if it had ceased to be complete and accurate.
A buyer who claims to have suffered prejudice from not receiving a complete and accurate Form 1 can sue the seller after settlement. Damages can be recovered and the contract can be set aside requiring repayment of the purchase price and all expenses.
The seller's obligation to give a complete and accurate Form 1 applies regardless of whether or not the purchaser has the right to cool off. The right to a complete and accurate Form 1 cannot be waived by the buyer.
The Form 1 will usually be prepared by the agent as part of offering the property for sale. The agent must undertake certain inquiries and must complete a part of the Form 1 in relation to those inquiries. Conveyancers are also able to prepare the Form 1. If you are selling your property privately, you must still ensure you have met your obligations to provide a complete and accurate Form 1.
Whether you're selling or buyer, you can always talk to us if you have any questions in regards to the Form 1 and your statutory obligations.