Tasmanian vendors to face higher disclosure requirements

Vendors in Tasmania are set to face higher disclosure requirements when selling their homes under a new set of draft rules being proposed by the Tasmanian government.

The draft Residential Property Transactions Bill 2012 seeks to repeal the 2005 “vendor statement” requirement, which was found after public consultation to be “impossible” to implement, and replace it with a new set of draft requirements.

The new requirements include that vendors provide sellers with third-party documents such as title documents, plans and a section 337 council certificate as well as giving consumers the option to obtain a building inspection report.

The draft rules also give the purchaser the right to rescind a contract in the private treaty sales of residential property during a cooling-off period of five business days after the contract date.

The new draft rules were compiled with the assistance of the Real Estate Institute of Tasmania and the Law Society of Tasmania.

Public consultation carried out by the Tasmania’s Consumer Affairs and Fair Trading (CAFT) in 2010 identified “a number of significant problems” with the vendor statement approach, including that “the property information available to a purchaser would be dependent on the knowledge and memory of the vendor and how long the vendor had owned the property”.

The public consultation also identified that the “vendor statement would require a vendor to make an assessment as to the condition of the property, and to make judgements in relation to matters concerning the legality of building work” and would expose vendors to the risk of legal claims if they “incorrectly answered a question required by the vendor statement in relation to a technical matter”.

In explaining the need for the new rules, CAFT says “there is general support for the view that the principle of 'buyer beware' no longer serves the interests of purchasers”.

“Further it is commonly accepted that purchasers should have the right to access relevant information when deciding whether to purchase a residential property,” says CAFT.

Introducing the bill, Minister for Consumer Protection Nick McKim said the new legislation focused on providing better information to consumers about illegal building works. 

“The draft legislation released today has been developed through collaboration between government and the real estate and legal professions,” he says. 

“I would like to thank the Law Society of Tasmania and the Real Estate Institute of Tasmania for their valuable input to this process. 

“Following the public consultation process I will be moving to finalise the bill and obtain cabinet approval with a view to introducing the legislation into the Parliament before the winter recess. 

“Tasmanian consumers have waited many years for the introduction of vendor disclosure, and I am committed to seeing this regime implemented,” he says. 

The government seeking public comment by June 12, 2012.