The importance of a Form 1 – Vendor’s Statement when selling residential property in SA
In South Australia, it is a statutory requirement under section 7 of the Land and Business (Sale and Conveyancing) Act 1994 (SA) (the Act) for a residential property seller to provide a Form 1 - Vendor’s Statement to the prospective purchaser. The Form 1 can be served on the purchaser either before or after the signing of the contract, but no later than 10 days before the settlement date.
A Form 1 discloses information gathered from “searches” of various agencies and government departments about the listed property. These include (but are not limited to):
- Title and valuation details;
- Mortgages that give lenders of finance certain rights over the property;
- Covenants that require the property owner to do (or refrain from doing) something;
- Any easements held by one party to use the land (for example, vehicle access, drainage, or sewerage infrastructure);
- Zoning information;
- Declarations of any cultural, heritage, or environmental impacts;
- Details of outgoings such as council and water rates, Emergency Service Levy and Land Tax;
- Any court orders or charges over the land that would need to be discharged before the land can change hands;
- Any compulsory acquisition orders; and
- Any council approvals on the land.
The Form 1 does not provide information about:
- The condition of buildings;
- Whether they comply with building regulations;
- The accuracy of measurements on the title; or
- Encroachments.
A building inspection report from a qualified inspector can provide this information.
The seller is legally responsible for the information contained in the Form 1, which is usually prepared by the vendor’s legal adviser/conveyancer. Therefore, the Form 1 must be factually accurate and complete. If it contains false, incorrect, or insufficient information, a buyer may choose to back out of the sale or take legal action.
Except in instances where the property is purchased at auction or by a company, the purchaser is entitled to a “cooling off” period (2 business days) in which the purchaser may withdraw from the contract, if necessary, by giving written notice to the vendor or acting agent.
Given that the Form 1 - Vendor’s Statement is a statutory disclosure document, it is an offence if it is not prepared in accordance with the Act. Serious consequences apply to both vendor and agent if the Form 1 is found defective or invalid. Scammell & Co’s registered conveyancers are experienced and efficient in the preparation of these all-important documents.
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*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.
The key differences between the types of property titles in South Australia explained
When buying a property in South Australia, you will need to take into consideration the type of title the property is – a title being a right of ownership of land.
The three most common titles are Torrens, Strata and Community Titles, and they will each impact differently on your ownership of a property.
The Torrens Title system was developed in South Australia and involves having a single certificate of title for an allotment of land. It is the most common type of title in South Australia, and simply means that (in most cases) the registered proprietor owns the land and any buildings on it.
The Strata Title system refers to multiple owners of properties on one piece of land, where all owners are responsible for the ‘common areas’, which could be a shared car parking space. Strata Titled properties are often managed by a Strata Corporation, and as an owner of a Strata property, you should be aware of the associated limitations and obligations. Namely, you will not be able to change the exterior appearance of your property without permission, and you will have to pay administrative and sinking fund levies owed to the Corporation.
Community Titles have since replaced Strata Titles for new divisions, although Strata Titles still exist. Community Corporation Managers act in a very similar capacity to their Strata Corporation counterparts. Although they are much alike, the key difference between Strata and Community Titles is that where Community Titles are defined by boundaries of land, Strata Titles are defined by the boundaries of a property itself.
If you would like to know more about land titles in South Australia, a Scammell & Co Certified Practicing Conveyancer can clarify the rights and obligations that come with the ownership of your new property.
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*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.
If you are buying or selling property you need to be aware of the importance of a Form 1
An integral part of selling a property, whether by private treaty or auction, is the statutory provision of a document called a Form 1 by the vendor to the purchaser. A Form 1 is a disclosure statement which contains certain details relating to the property being sold and must take the form set out in the Land and Business (Sale and Conveyancing) Act, 1994 (the Act) including:
- the purchaser’s “cooling-off” rights (as described under section 5 of the Act); and
- the particulars required by regulation of -
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- all mortgages, charges and prescribed encumbrances affecting the land subject to the sale;
- if the vendor acquired a relevant interest in the land within 12 months before the date of the contract of sale – all transactions relating to the acquisition of the interest occurring within that period; and
- any prescribed matters.
This information is based on responses received from statutory authorities, council searches and the vendor’s knowledge of the property.
When a vendor engages the services of a real estate agent it is the agent’s responsibility to prepare the Form 1. A vendor must ensure the information provided to the agent is accurate and complete.
The time at which a Form 1 is served on a purchaser will determine their “cooling-off” rights. If the Form 1 is served before the contract is signed, then the “cooling-off” period commences on the date the contract is signed. If it is presented after the contract is signed then the “cooling-off” period does not start until the Form 1 is served on the purchaser.
The method of “cooling-off” must comply with the requirements of the Act for giving written notice to the vendor or the agent acting on behalf of the vendor.
Where a purchaser exercises its “cooling-off” right and withdraws from the contract, it is entitled to the return of money paid (deposit) under the contract, except that if the deposit does not exceed $100.00 then the vendor is entitled to retain that money.
Not all purchasers of land have the right to “cool-off”. For example, the “cooling-off” period does not apply if:
- the purchaser, before signing the contract, received independent advice from a legal practitioner concerning the contract and the practitioner signed a regulation approved certificate that the practitioner gave the purchaser that advice; or
- the property is being purchased by auction; under a contract for the sale of land (other than residential land) by a company; or under an option to purchase and that option is exercised.
If the Form 1 is found to contain inaccuracies, it is deemed to be defective. If this is the case, it will not trigger a “cooling-off” period. An inaccurate Form 1 gives the purchaser the right to rescind the contract at any time up until settlement. The vendor can alter the Form 1 to correct any inaccuracies by way of a Notice of Amendment, and a new cooling off period will apply from the date the corrections are made.
The relationship between the Form 1 and the “cooling-off” period is important because the Form 1 will disclose particulars about the property which may impact on the purchaser’s decision to purchase the property.
If the purchaser has already settled on the property and either a Form 1 was not provided or the Form 1 is later found to be inaccurate, there are remedies available to the purchaser. The purchaser may apply to the Court to have the contract set aside (or not). Either way, the purchaser can be awarded damages for any loss which they incurred as a result of the inaccurate Form 1.
It is an offence under the Act not to provide a Form 1 disclosure statement to the purchaser at least 10 days prior to settlement. It is also an offence to serve and incomplete or incorrect Form 1. Fines of up to $10,000 apply for such offences.
Given the importance of an accurate Form 1 many agents seek independent legal assistance to prepare the Form 1 on their behalf. Scammell & Co.’s experienced and knowledgeable conveyancing team provide this service to agents with the aim of providing fast turn-around times. Please contact Tricia Jarvis or Anna Ardolino for prompt assistance.
*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.