Abstract
This article questions the effectiveness of the current seller disclosure regimes in Australia and asks whether the statutory regimes have failed to achieve balance between the interests of buyers in being appropriately informed and the financial burden to the seller of extensive seller disclosure. This article suggests that it is time for governments to re-evaluate the balance between buyer and seller by giving greater consideration to not only what buyers actually want to know when buying a residential property but also the burden imposed on sellers of real estate. The article examines disclosure legislation in residential conveyancing throughout Australia, the form of the various obligations and their effectiveness as an instrument of raising buyer awareness of prospective defects in the land being purchased. It seeks to investigate whether compliance with the various provisions by a seller create more problems for a seller given the seller's reliance for disclosure information upon local authorities and other government agencies than benefits for a buyer by analysing the case law on the mandatory disclosure provisions, largely in New South Wales, Victoria and to a limited degree in Queensland. It concludes by urging some standardisation of the substance of mandatory disclosure and simplification of the provisions from an operational standpoint which might ultimately lessen both the cost of conveyancing to the consumer and the incidence of litigation between consumers as much as possible.
Highlights
Mandatory disclosure of information by sellers to buyers of residential real estate has been viewed by many as providing the modern panacea for the perceived information imbalance between sellers and buyers, which is largely attributed to the doctrine of caveat emptor
This article suggests that it is time for governments to re-evaluate the balance between buyer and seller by giving greater consideration to what buyers want to know when buying a residential property and the burden imposed on sellers of real estate
Having regard to the aims of seller disclosure stated above we propose to assess the effectiveness of seller disclosure regimes in providing a balance between the interests of buyers and the cost burden to sellers by examining three issues that link broadly to the content of disclosure, the manner of disclosure, and the timing of disclosure.[43]
Summary
Mandatory disclosure of information by sellers to buyers of residential real estate has been viewed by many as providing the modern panacea for the perceived information imbalance between sellers and buyers, which is largely attributed to the doctrine of caveat emptor. From these examples it can be seen that there were many instances where the seller who had vital information affecting the value of a property at the date of sale had no obligation to disclose it to a buyer This has led many commentators to criticise the doctrine of caveat emptor as outdated in the context of modern land usage and building and town planning regulation.[31] Whether there exists an obligation generated by the necessity for a seller to comply with the Trade Practices Act 1974 (Cth) or Fair Trading legislation depends upon the factual matrix and cannot be assumed.[32] This is a significant part of the reason why statutory disclosure regimes were established. The question is whether there is any consistency in their approach, whether they serve their ultimate purpose to inform a buyer of a serious problem with land, and whether the regimes themselves, cause greater compliance problems for a seller than they provide benefit for a buyer
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