Introduced under the Property Law Act 2023, the reforms will, for the first time, require sellers to provide a prescribed disclosure statement, known as Form 2, to prospective buyers before a contract is signed.
REIQ CEO Antonia Mercorella said the changes create “a single statutory disclosure regime” that will transform property transactions in the state.
“From 1 August, a seller will need to provide a buyer with a Seller’s Disclosure document, and that document will need to be given to the prospective buyer before they enter into the contract,” Ms Mercorella said.
Ms Mercorella said that buyers will start to see these disclosure statements at open homes, auctions and in electronic form.
“The buyer will be given a copy of the title so that they can see the legal description of the property and determine if there are any registered encumbrances or other matters affecting the property,” she said.
“They will also be given a copy of the survey plan, along with information about zoning, pools and pool fences, planning and environment issues, and whether the property is affected by any notices or orders issued by statutory authorities.
“If the property is a unit or apartment, there is a series of additional body corporate related disclosures that will also need to be made.”
However, she stressed that the scheme does not cover every possible issue a buyer might need to investigate.
“The scheme doesn’t extend to flooding or natural hazards,” she said.
“Similarly, it doesn’t include a pest and building report.
“If buyers are concerned about the structural soundness of the property or pest infestation issues, they will still need to do their own due diligence the way they would today.
“It also doesn’t include things like asbestos or the current or historical use of the property.”
Ms Mercorella said it was important for buyers to understand the limits of the new regime.
“The regime will provide buyers with lots of really useful information. It’s absolutely designed for consumer protection, that’s what it’s about.
“But equally, buyers should be careful not to think that it’s an exhaustive list of absolutely everything they need to know about the property. It certainly isn’t that.
“There is still an element of buyer beware, and it’s important that buyers continue to carry out their own due diligence outside of the matters included in the regime.”
The reforms will also affect agents, who will play a key role in helping sellers meet their new obligations.
“Most sellers are unlikely to be aware of the new legislative requirements,” Ms Mercorella said.
“Agents will need to notify sellers of these requirements and seek instructions about how the seller wants to go about ensuring that the document is prepared and then given to prospective buyers.
“Some agents have indicated they intend to prepare the document themselves, while others will recommend that the seller have the document prepared elsewhere.
“Another option is for the seller to ask the real estate agent to prepare it but seek assistance from a solicitor.
“All of those options are perfectly acceptable.”
Ms Mercorella encouraged agents to take the lead in guiding clients through the transition.
“We’re trying really hard to explain to people that this regime is a significant change, but also that it doesn’t remove the need for buyers to do their own homework,” she said.
“The scheme is about transparency and consumer protection, but it is not a one-stop shop.
“Buyers must continue to take an active role in their due diligence.”
