Well, it is more paperwork… but it is important!
Queensland legislation requires sellers of units to disclose certain matters to buyers. The amount of disclosure that is required will depend on whether the property you are purchasing is completed, or if it is to be completed at some stage after the contract has been signed.
The seller’s disclosure contains information that will both directly and indirectly affect you once you become the owner of the property. Most contracts do not allow buyers to make objections to matters disclosed by the seller once they have been signed. Therefore, it is important for sellers that the information within a disclosure statement is accurate, and important for buyers that they read and understand the disclosure materials to make an informed decision about the purchase.
For existing property, the seller is required to disclose things such as:
For proposed new units or townhouses the seller is required to disclose things like:
A buyer may be able to terminate a contract for purchase if the disclosure statement is –
For this reason it is imperative for sellers that the information is accurate, and imperative for buyers that you undertake suitable searches to confirm the information is accurate.
For existing units, no.
For units that are to be completed in the future, the seller may provide an updated disclosure in what’s called a ‘further statement’. If the further statement contains changes that “materially prejudice” a buyer, the buyer may have a right to terminate the contract.
However, a buyer’s right to terminate for changes in a further statement expires 21 days from the date that the further statement is received. Buyers should ensure that they engage a lawyer to fully review any further statement and advise on any changes prior to this time.
There is no black and white answer as to what changes will constitute material prejudice, and the changes must be considered from the perspective of the buyer.
There can be drastic consequences for either party if they get this wrong.
Disclosure Statements are definitely documents that for sellers need to be prepared correctly, and for buyers should be read and understood before signing a contract.
However, for buyers it is worth remembering that disclosure statements are not required to include all information which might be relevant or affect the property.For example, disclosure statements are not required to include information about:
To get all these nitty gritty details, a buyer needs to order a body corporate records search.
We recommend that, if possible:
If you have any questions about disclosure statements, purchasing units or townhouses, please contact our team of property and conveyancing lawyers today.