The REIWA Seller’s Disclosure Statement: A vital tool for agents.

The REIWA Seller’s Disclosure Statement: A vital tool for agents.

A recent settlement case has highlighted the importance of using the REIWA Seller’s Disclosure Statement as a tool to gain assurances from sellers and provide protections for both buyers and agents during settlement. In this instance, a dispute over the functionality of a bore on a seller’s property threatened to adversely impact the sale and cause delays.

A property located within a canal development was listed for sale. In the course of listing the property the agent asked the seller, Mrs Adiani, (not her real name) to complete a Seller’s Disclosure Statement

On that form the seller indicated that there was a bore on the property and confirmed it was in working order. In fact, the seller, who was recently widowed, had never operated the bore herself.

During the sales process, the buyer became aware of the bore on the property, and assumed that it was in working order. However, on later inspection the buyer discovered that the bore was not functional.

A contractor was sent to inspect the bore with a view to providing a quote for repairs. In the course of the inspection it was discovered that the proximity of the property to the canal development had caused it to be adversely affected by ongoing changes to the local water table. As a result, even if the bore’s motor had been replaced, it would have only pumped salty water, rendering it useless.

After some negotiations it was agreed that the seller would pay for decommissioning the bore.

The fact that the agent had the seller complete the disclosure statement protected the buyer from a costly bill for decommissioning the bore and the agent from being accused of misrepresentation by the buyer.

Therefore we recommend agents use the REIWA Seller’s Disclosure Statement as a key tool when listing a property for sale to avoid disputes and delays during settlement.

Image by Homespot HQ via Flickr.