My Tip: Hire a Conveyancer to Prepare the Legalities
In NSW, by law, before you can advertise a property for sale, you must prepare and sign a Contract of Sale, which includes a section known as a Vendor Disclosure Statement. These two documents are crucially important to the sale of your home, and any discrepancies or mistakes in either document could see the sale delayed until new ones are drawn up. In some cases it can even be the cause of the sale falling through.
The preparation of the Contract of Sale and Vendor Disclosure Statement is really a part of the conveyancing process and since the laws that govern conveyancing in NSW, at both a state and local level, are complex and ever changing, I always recommend that my vendors hire a conveyancer to help prepare the Contract of Sale and Vendor Disclosure Statement.
The Contract of Sale needs to include standard information about your home, such as the asking price, what’s being sold with the property, and so forth, while the Vendor Disclosure Statement requires more detail. In the Vendor Disclosure Statement, you need to include documents that relate to the title, easements and zoning, as well as any evidence of restrictions of use.
Vendor Disclosures Relate Only to Land
In NSW, the disclosures you are legally obliged to make only relate to the land itself, and not the structure or building. It’s up to buyers to carry out their own building and pest inspections to check for things, such as rot or termites. The only exception relates to swimming pools and spas, which now require a certificate of compliance to be included in the contract of sale.
Although vendors are under no obligation to have building and pest inspections carried out, it is sometimes helpful to do so before putting your home on the market, particularly if it turns out you do have a problem. You could potentially save yourself time and money by addressing any building or pest problems before putting your home up for sale, rather than after the fact, when you may have already lost interested buyers.
Implied Terms of the Contract
Even though you can add special conditions to the standard contract for the sale of land, there are always terms that are implied in the contract. These implied terms are regulated by legislation and exist to promote the fairness of the transaction between your and any buyers interested your property.
Perhaps the most important implied term relates to undisclosed encroachments. If there is an encroachment that is not disclosed in the contract for sale, the buyer is entitled to ask for clarification on how it affects the property, and may even be able to walk away from the sale. You should appropriately describe to the buyer the details of the encroachment and attach a diagram of the encroachment to the contract for sale.
A contract of sale also contains implied warranties. These warranties generally ensure that the land being sold is not affected by any matters that are not disclosed in the contract. So if the buyer later finds out that the land was, in fact, affected by a mortgage or council development, for example, then the buyer is allowed to rescind the contract and cancel the sale — although they will not be able to seek any damages from you.
This, again, is why I say it’s a good idea to hire a conveyancer to help you prepare the Contract of Sale and Vendor Disclosure Statement. As professionals, they’ll be able to source all of the right documents to ensure nothing derails the sale of your property.
If you’re thinking of selling, contact me for a confidential market appraisal of your home. Alternatively, to learn more about selling property on Sydney’s lower north shore, subscribe to receive access to my free educational videos or continue reading my blog.