Selling a home involves more than presentation and price. As a seller, you also have legal obligations about what you tell buyers, both in the contract of sale and in your conversations. Getting disclosure right protects the sale, your reputation and your own peace of mind after settlement. This guide is general information only, and your solicitor or conveyancer should advise on your specific situation.
Disclosure Starts With the Contract
In NSW, the vendor is responsible for preparing the contract of sale before the property is marketed. The contract must include certain prescribed documents, which generally cover the title details, a plan of the land, a Section 10.7 planning certificate from the council and a sewerage service diagram, along with information about any notices, orders or charges affecting the property. Your solicitor or conveyancer prepares these, and it is important to review them early so there are no surprises when a buyer’s solicitor reads the contract.
Special Situations That Require Extra Documents
Some properties need additional disclosure. Examples include:
- Strata properties: A strata report and information about levies and by-laws are generally important to buyers.
- Properties with a pool: Pool registration and compliance certification are generally required.
- Owner-built homes: Specific disclosure and, in some cases, reports on the work may be required if the home was built or renovated by an owner-builder.
- Properties affected by flooding, bushfire or heritage controls: These are generally noted in the planning certificate.
Your solicitor or conveyancer can confirm what applies to your property.
Telling the Truth in Conversations and Marketing
Disclosure isn’t only about documents. Under consumer law, sellers and agents must not mislead or deceive buyers, whether through what they say, what they leave out or how a property is described. If you know about a significant issue, such as a past flood, a serious defect, termite damage or an unapproved structure, it is risky to stay silent when asked about it, and risky to give an answer that is not accurate. Agents have their own obligations and will usually ask you about known issues, so it is better to be upfront.
Known Defects and Title Issues
There is a difference between a property’s physical condition and issues with its title. Sellers are generally expected to disclose known defects in the title, such as restrictions or rights that are not apparent. For physical condition, buyers are generally expected to carry out their own inspections, but that does not give a seller permission to conceal a known problem. If you have received a pest or building report, speak with your solicitor about how to handle it.
Unapproved Works
Renovations carried out without the necessary council approvals can cause serious problems at sale. Buyers’ solicitors and lenders may raise questions, and buyers may ask for repairs, a price reduction or approvals to be obtained before settlement. If you suspect there are unapproved works at your property, it is worth speaking with your solicitor and the council early, rather than waiting for a buyer to discover it.
Disputes, Notices and Orders
If there are any council notices, neighbour disputes, fencing issues or tribunal proceedings affecting the property, ask your solicitor what needs to be disclosed. Some of these will appear in the contract documents, others may not.
Why Honest Disclosure Helps You
It may feel uncomfortable to raise a problem, but disclosure can reduce the risk of a buyer withdrawing late, negotiating hard after an inspection or taking action after settlement. A well-managed disclosure, with a clear explanation and, where possible, a solution, can keep the sale on track.
How to Prepare
- Gather records of renovations, approvals and certificates.
- Ask your solicitor or conveyancer to prepare the contract early.
- Consider whether a pre-sale building and pest inspection would help you understand the property.
- Tell your agent about any known issues so they can handle enquiries properly.
Frequently Asked Questions
Do I have to tell buyers about a past flood? Flood-related planning controls usually appear in the planning certificate, but if a buyer asks, you must not give a misleading answer. Speak with your solicitor if you are unsure.
What if I don’t know about a defect? Disclosure obligations generally focus on what you know, but you should not ignore obvious signs, and you should answer questions honestly. If in doubt, a pre-sale inspection can help.
Do I need to disclose a neighbour dispute? It depends on the nature of the dispute and whether it affects the property. Ask your solicitor, since some issues may need to be disclosed.
Who prepares the contract of sale? In NSW, the vendor’s solicitor or conveyancer usually prepares the contract before the property is marketed.
Can a buyer cancel after settlement for something I didn’t disclose? Buyers may have legal options if they were misled or if there was a serious undisclosed issue. This is why honest disclosure matters. Seek legal advice for specific situations.
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This article is general information only and is not legal advice. Please speak with a solicitor or licensed conveyancer about your circumstances.
