What do I have to disclose when selling my house?

What do I have to disclose when selling my house?

March 13, 2020

Consumer law in Australia helps protect home buyers across the country from buying a home that has damage or significant problems. The days of deceit and deliberately hiding faults to secure a home sale are becoming scarcer as regulations and mandatory disclosure have become part of state law.

Laws vary from state to state and are upgraded frequently so always check with a qualified legal representative to know what your disclosure requirements are before you sell.

Here are some general things to keep in mind.

Property defects

It's common practice (and a smart move) for homebuyers to get independent building and pest checks before they sign on as owners of a property. Even with this practice as standard, as the seller, you need to know the condition of your property and disclose any structural problems. This includes pest infestation, broken appliances or fixtures and damp.

As well as being required by law in many states it will put you in good standing if you are upfront about an issue rather than waiting for the buyer checks to come back and call you out.

Pre-contractual disclosure obligations

This relates to any limitations, restraints or "defects" in the property title.

Easements

Easements are when your land is needed for use outside your own. It might be that electrical or water lines run underground on your property or that your property shares a driveway with the neighbours. Easements are important to make known because it can affect what building, renovation or modifications can occur on a property.

Covenants

Covenants are rules and obligations that the owner must abide by. These are especially common in house and land packages and require things like streets be well maintained including landscaping, certain types of mailboxes to be used, home-front maintenance to be of a certain quality.

Leases

If you are leasing your property you will need to disclose the current lease agreement if the rental period continues after settlement.

Zoning

What zoning disclosure exists depends on land history so different states will have different laws reflecting this. You can expect flood zone disclosure for properties in Queensland and NSW while most South Australian, New South Wales and Victorian homes will need disclosure if they are in bushfire-prone zones. Tasmania has a few instances of unmarked graves from early settlement days which need to be disclosed if there are any on your property.

In many cases, these will affect property care and maintenance as well as insurance for the new owner.

Asbestos

The ACT and recently Victoria have mandatory laws around disclosing asbestos on the property. In cases where you do not know you still need to disclose if it is likely that you could have or have previously had asbestos anywhere on the property.
This will be one that other states will most likely add to their requirements soon so always check for updates on this issue.
With the ACT laws, you are required to include an Asbestos Advice and Acceptance Report.

Building consent

If you have made renovations to your property you will need to provide documentation and paperwork that proves the work was carried out by professionals and is up-to-date with standard building requirements and current local and state council allowances. Any building works that do not have full approval will also need to be disclosed as such.

Sensitive matters

This is another one that really varies from state to state and is liable to change in the future.

If there has been an incident in the property's recent history that may alter its desirability and therefore it's value, it must be declared. This includes vicious crime, accident or murder.

Another topic under the banner of sensitive issues is drug manufacturing. Buildings that have been used to make illegal drugs pose huge health risks to the next occupants. As well as declaring illegal drug manufacturing in most states, it is also required that the building has undergone rehabilitation to help reduce health risks and proof is provided of these efforts.

Boundary disputes between neighbours are not uncommon and can cause headaches for new owners that can get heated and expensive if legal aid is required. Because of this disclosure for of any boundary disputes is required in some states before a contract is signed.

Can I get away with not disclosing an item?

The fines and consequences of nondisclosure vary from state to state. Best case scenario is you lose your buyer and have to continue your selling campaign, which can cost time and money. Worst cases can see steep fines and jail time.

Really it's a matter of karma, you will most likely be buying yourself at some point, maybe even in the same timeframe as selling your home and you want the certainty and reassurance that you know what you are buying. As a conveyancer, I see all sorts of negotiations put into buying contracts so I know without a doubt that disclosing an issue doesn't mean you can't sell and doesn't mean you can't get a great price. To know where you stand, be sure to speak to a legal representative about your obligations well before you look to sign your name to a property. The more information your conveyancer has, the smoother the process and the cleaner the sale.

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