Mandatory disclosure forms relating to property sales and leases


S 67 of the Property Practitioners Act requires property practitioners to utilize a prescribed property disclosure form attached to a sale or lease agreement to be signed by all parties to the agreement in question.

The section was introduced to ensure increased transparency by way of disclosure of key component features of a property and the stated condition of such identified component features. 

The disclosure forms an integral part of the agreement in question. Should a property practitioner not include a disclosure form, the agreement is then treated as if no defects or deficiencies exist in respect of the property in question.

A property practitioner failing to comply with the provision may be held personally liable by an affected consumer (purchaser or lessee). The Authority referred to in the Act may also sanction the property practitioner.

The Act further provides that nothing in the section prevents a consumer from undertaking its own inspection to ascertain the state of the property before concluding a transaction.

Since introduction of the provision some aspects that have required advice have included the following:

  1. Whether the disclosure form is only required for residential property transactions?

The disclosure form is required for any sale or lease transaction where a property practitioner is involved in the transaction. Accordingly commercial property transactions would require a disclosure form to be completed before the property practitioner concludes a mandate regarding the property. 

  1. Whether a disclosure form is mandatory if there is no mandated property practitioner appointed?

In the absence of a property practitioner appointment no disclosure form is required.

  1. Is it prudent to include a due diligence provision in a sale or lease agreement?

Such a provision is not usually included in a residential agreement although leases usually contain a provision for the tenant to inspect and record faults requiring attention or remedy by the landlord. In commercial sales an appropriately worded due diligence clause affords a buyer an opportunity to inspect the property after conclusion of a transaction and elect to proceed or not within the stipulated period.

  1. Does the completion of a disclosure form exclude other relief regarding the transaction?

A purchaser or lessee can still rely on common law disclosure obligations where defects relating to a property are within the knowledge of the selling or letting party and withheld from the consumer as a misrepresentation to conceal disclosing a defect/s to the consumer. A disclosure form cannot serve to exonerate a seller or landlord from liability in this instance.