Disclosure When Selling Property

 

Opportunity in Castor BayNo property is perfect, but to entice buyers you want to show off the best points about the house you are selling. There are certain things that you will need to disclose, however.

Your real estate agent is obliged to inform the buyer about any defects or risks relating to the house or property. While they will want to obtain a good purchase price for your benefit and theirs, they also need to be fair to the buyer without misleading them.

To minimise the possibility of complications, disputes and damages claims for undisclosed issues, tell your agent about all the things a new buyer will need to know right at the beginning of the process of selling your property.

Building consent
If you have made additions to the property, provide the necessary code compliance or building consent certificates so that the buyer knows that everything has been signed off properly. If there are any outstanding issues but the purchaser still wants the property as it is, the disclosed details can be written into the contract by your lawyer. To show the buyer that all work is up to date, New Zealand real estate agents can help you obtain a LIM (Land Information Memorandum) report, and Australians can organise a survey report and building certificate.

If your neighbour has proposed any work on fencing, trees or buildings that will affect your property, be clear about whether you gave or withheld consent, hopefully avoiding potential disputes for the new homeowner.

Property defects
It goes without saying that any known weathertightness issues have to be declared. Because the issue has been well publicised for years now, many house hunters will automatically ask if the house is a leaky building.

Check out whether there are any other problems affecting the durability or habitability of the house, and if you aren’t sure, get a building inspection done. Prospective buyers are always advised to have the building professionally checked, but selling a house with a report already done can be a good selling point.

If you uncover any issues, you can choose to declare them and hope the house will sell in its existing condition, or fix them up before listing the property.

If the property sale includes any chattels or fixtures that don’t work, the agent should know about them so prospective buyers can be told.

Sensitive issues
Agents also need to consider whether or not to divulge sensitive historical issues related to the property, such as drug manufacturing or a death, accident or vicious crime connected with the address. While this may put some buyers off, there are people who think this sort of information needs to be discussed. Ask your agent for the best approach and they can explain the disclosure laws for the area where you live.

Savvy buyers are becoming increasingly aware of the risks associated with buying a home in a location prone to natural disasters. Council reports should provide relevant information about natural hazard risks in the area.

Honesty is the best policy
Your agent needs to be able to answer any questions confidently, so it is always best to keep them in the loop about any property issues. If you aren’t sure what to declare or whether your home has any problems worth mentioning, a good real estate agent will be able to advise you about how to get your property checked professionally, and what to disclose to interested buyers.

Article supplied by Mortgage Express

5 Responses to “Disclosure When Selling Property”

  1. Claire Reply

    Hi Tony
    Please advise, I have just bought a small house. On the day of settlement and I got access to the property I noticed that a large crack (30cm plus) is in the shower tray that cannot be repaired, oven not working, broken pane of glass, lightbulbs missing etc. I have written to vendor via the estate agent to see if they will compensate for the damage to avoid court action and they are quoting

    Clause 8.1 states “the purchaser must serve notice of the claim on the vendor on or before the last working day prior to settlement”.

    Id appreciate your feedback. The agent/vendor had provided no disclosures. The house had been tenanted, tenants moved out three weeks before settlement.
    Thank you

    • Tony White Reply

      Hi Claire
      You should immediately contact your solicitor!
      Prior to settlement you are allowed 1 pre-settlement inspection. Did you do this? You should then advise your solicitor of any claims. Your solicitor would normally withhold part payment of the sale price pending the seller remedying the issues you outline.
      To be fair if a house is tenanted the agent and seller may not have known of the damage. But the house should be in the same condition as when you agreed to buy it.
      In a case like this your solicitor might withhold $2000 pending repair, and the sellers insurance should cover it.
      If you have already settled it gets harder, contact your lawyer ASAP
      Tony

  2. Louise Reply

    Hi there, I would appreciate your advice. I purchased through an agent a 1970s concrete block unit, and basically when it was purchased the neighbouring adjoining property was vacant. The owner of that property was also out of country and not able to be contacted (fleeing from the law lol!) so it could not be entered. I was curious about noise but couldn’t check. the property appeared sound, but I did not ask specifically about noise transfer.

    But in writing I did ask the agent if there was anything I should know or be aware of regarding the property, and indicated things like finicky locks, the garage door, or anything else I should know. This was an indication at that point to give disclosure on any issues, but nothing relevant was disclosed to me.

    However then a couple of months later a new tenant entered the adjoining property. Well I could hear them as clear as day, like they were in my own unit. Much, much louder and more clear than any other unit or adjoined property I had ever been it. It is awful, I feel the property is severely devalued by this, and my daily life has been miserable since. I can hear their conversations, using the kitchen, walking on their floor, doors closing etc. It has given me depression and insomnia. I am kept awake at night and woken in the morning by the transfer of just regular, every day noise. I have to wear earplugs to sleep. The neighbouring tenant recently had a cold and both myself and my flat mate could hear her coughing so loudly.

    The previous owners lived their for 11 years and I know would have been aware of this issue, and I feel it should have been disclosed, as had I know of this, I would either have not have purchased it or paid considerably less to compensate the work that will be needed to soundproof it to at least a normal standard. It has had a great impact on my quality of life.

    I am considering taking them to the disputes tribunal, I have also spoken to someone in complaints at the REAA and they recommended this route. Be interested to hear more thoughts on the matter, thank you.

  3. Sheryl Handley Reply

    Hi, I recently purchased my first home through private sale and the owners never disclosed necessary information. I have since had to pull out the kitchen and replaces the flooring due to ongoing leaks from hot water system and dishwasher. The external walls and floor in the ensuite needed to be replaced as flashing had not been put on the roof causing major water issues. None of this information was passed on at the time of sale and it has cost me thousands. I have now used up all my savings and very stressed. Is there anything I can do?

    • Tony White Reply

      HI Sheryl…You need to contact your lawyer. A private seller is not “in trade” and is therefore not bound by the Fair Trading Act. There is no requirement for a private seller to make any disclosures or even just tell you the truth. They can make misrepresentations or conceal defects and your only recourse is through common law. Buyer beware when you buy privately.

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