The Conveyancing Conundrum
Section 32 of the sale of land act 1962 (the Act) says that certain disclosure statements must be provided to a purchaser before a contract of sale is signed. This document is commonly referred to as the vendor’s statement.
These disclosure statements are included in the vendor’s statement in the form of certificates provided by the relevant statutory authority.
Information provided to the purchaser about the property includes zoning, local government controls, council and water rates information and any restrictions on the use of land e.g. covenants, easements etc.
If one or more of these disclosure statements are missing or inaccurate this can give rise to a purchaser rescinding the contract prior to settlement.
On many occasions I have viewed vendor’s statements that have omitted information certificates from statutory authorities. The lawyer or conveyancer has not properly prepared the statement.This has resulted in the vendor’s disclosure obligations not being fulfilled according to the Act.
Also, some buyers will not have the contract and vendor’s statement checked prior to it becoming unconditional. This could effect the buyer's desired use of the land if there is something unfavourable in the vendor's statement.
Even if the purchaser instructs a lawyer or conveyancer to examine the contract and vendor’s statement prior to making an offer there still exists serious risks for the purchaser.
The fact is lawyers and conveyancers never actually view the subject property and therefore will not be aware of the many important factors that can impact on the purchaser’s liability, intended use of the land or quality of lifestyle.
Not all important information is disclosed in the vendor’s statement. An example of this is the impact of surrounding properties on the subject property or the condition of common areas in the case of an apartment purchase.
My role as a buyers advocate is to provide information to a client so that they make the optimum property purchase; this may be for lifestyle or investment purposes. This can involve sourcing information that has not been included in the vendor’s statement.
I have developed detailed checklists which include assessing a properties orientation, impacts of surrounding properties, renovation potential, etc.
It is important that buyers have the contract of sale carefully examined by a qualified person prior to it becoming unconditional.
It is also important that the many other important factors that cannot be ascertained through checking a contract of sale and vendor’s statement is scrutinized by an independent buyers advocate.