A Disclosure Statement is a legal requirement and MUST be provided to a Buyer PRIOR to execution of the Contract. If the Disclosure Statement IS NOT �substantially complete� it may give a Buyer a right to terminate the Contract.
Section 209 of the BCCM Act provides that the buyer may cancel the contract if it has not already been settled, the disclosure statement is inaccurate and the buyer would be materially prejudiced if compelled to complete the contract given that inaccuracy.
The buyer may also cancel the contract under section 209 if, despite reasonable efforts by the buyer, the buyer has not been able to verify the information contained in the disclosure statement. When giving notice of cancellation, the buyer must advise the seller of the efforts made by the buyer.
A Disclosure Statement pursuant to Section 206 DOES NOT PROVIDE DETAILS IN RELATION TO latent (hidden/dormant) or patent (clear/obvious) and not defects in common property and actual, contingent or expected liabilities of the Body Corporate.
If a Section 206 Disclosure is obtained the Seller should complete this section and should be signed by the seller. A Real Estate Agent is NOT the Sellers Agent for the purpose of this document unless the Seller has authorized the Real Estate Agent in writing to sign the document on their behalf.
A Disclosure Statement obtained from a Body Corporate Manager DOES NOT PROVIDE DETAILS IN RELATION TO Latent or patent defects in common property and actual, contingent or expected liabilities of the Body Corporate.
Section 223(4) provides that the seller is taken to have knowledge of a matter if the seller has actual knowledge or ought reasonably to have knowledge of the matter
A seller, therefore, needs to be aware of these very broad and wide-ranging warranties and should disclose any issue which may fall under these warranties in the "Seller's Disclosure" section which forms part of the Reference Schedules in the REIQ Contracts for Residential Lots or Commercial Lots in a Community Titles Scheme ( and ADL Contracts).
The challenge is obtaining the necessary information regarding the body corporate to ensure that these disclosures can be made to avoid loosing a sale.
The most prudent approach for a seller would be to undertake a body corporate records search by a reputable search agent and annex a copy of the search to the contract. If the seller does not wish you to take this approach, then there may be an increased risk that the buyer will have a right to cancel the contract (or a claim for damages) for a breach of these warranties if a body corporate records search by the buyer reveals matters of which the seller was unaware and which have not been disclosed.
Dissatisfied buyers are the last thing you want if you seek long-term stability in your Agency. Happy buyers are your sellers of the future