A property disclosure form requires a seller to disclose any known defects or problems with the property, for example leaks, cracks, or electrical faults.
The disclosure form ensures that buyers are aware of any potential liabilities associated with the property that they are purchasing.
Regulation 22.214.171.124 of the Property Practitioners Act, 2019 provides that an estate agent shall convey to a purchaser or lessee all facts as are, or should reasonably in the circumstances be, within his/her personal knowledge and which are, or could be material to a prospective purchaser or lessee.
This Regulation requires that:-
- The estate agent must disclose facts within his/her knowledge;
- The estate agent must disclose facts which should be within his/her knowledge. If the agent claims to be an area specialist, they need to be aware of issues affecting that area;
- The estate agent must disclose facts which are material to the purchaser;
- The estate agent should disclose facts which could be material to the purchaser. This requirement requires a wide exercise of discretion.
The purpose of a disclosure document is to:-
- Serve as a record of the condition of the property for the purchaser. It does not deal with detailed property issues, it deals with broader property disclosures.
- Document or record the seller’s instructions with regards to the condition of the property.
Sellers are often reluctant to disclose any issues or defects in fear of such disclosure reducing the purchase price or cause a delay in the transaction.
BLC Attorneys advise that the importance of disclosure forms cannot be overstated. Issues in the property should be disclosed and/or dealt with before the sale to avoid legal disputes after the sale and the disclosure document should also be annexed to every sale agreement whether commercial, residential, or vacant land.