What is a Seller’s Disclosure or Vendor’s Statement and Why Should You Request One?

A Seller’s Disclosure Statement, known outside of WA as a Vendor’s Statement, is a document that can provide you with valuable information when considering the purchase of a property. When buying a property anywhere, especially in Perth, we always recommend that you request a Seller’s Disclosure Statement from the listing agent before making any offer to purchase a property.

Seller Disclosure by Property Management Firm

You should note that in Western Australia there is still no legal requirement for the seller to provide this statement, however most real estate agents will do their best to ensure that they do.

The statement covers the Seller’s knowledge about many important areas affecting the use and value of their property. You should always look to cross check information with the title, council and your settlement agent.

See a list of some of the important items contained in the Seller’s Disclosure Statement below:

Demands & Orders

The seller is required to disclose any demands or orders owing to any authorities or any issues regarding dividing fences. These items can hold up settlement if they are not discovered until later.

Covenants

These are prior or “grandfathered” agreements that restrict the use of the property. This can be a limitation on building size, land use or an agreement not to subdivide, for example. Covenants are very popular in new estates to protect the look and feel of the suburb, so make sure you read over them so you know what you can and can’t do.

Easements

Easements give others the right to use your land. For example, a neighbour may be allowed to drive across your property to get to their driveway, or walk across your land to get to the beach. Easements for drainage or sewerage pipes are also common.

Zoning Restrictions

This is easily researched on your own by speaking to the local council, but it is handy to have in your disclosure document. It is how the local council allows you to use your land.

Soil or Drainage Defects

These issues can be completely hidden from sight but significantly affect the structural integrity of the house over time.

Pest Inspections & Treatment

While we suggest doing a pre-purchase pest inspection, this will tell you if the Seller is aware of whether the property has been regularly treated and inspected for pests. Especially important if you are purchasing a property in the hills areas where termite and borers can be more common.

Connection to Sewer or Septic Tanks

It is very important to confirm if the property is connected to sewer or septic tanks. Some areas are not sewered and this will impact the development potential for the property.

Why These Statements are Important

These statements are to ensure that the agent is aware of all items affecting a properties use and value, for which you should in turn be made aware of before entering into a contract to purchase the property. They cover aspects of the house that won’t be found in an inspection and can’t always be found by checking records.

Getting as much information from the Seller, ensures your are purchasing the property with open eyes and can prevents you from later discovering “surprises” that can cost money, either directly or indirectly.

Get the “Investor’s Edge”

At Investors Edge, we help buyers and sellers avoid costly mistakes by making smarter investment decisions all over Perth. Call 1300 472 427 to learn more.

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