The Form 1, or Vendors Disclosure Statement, provides certain information relating to the property being sold and provides the cooling off rights.
It is a formal statement that is served on the purchaser under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994.
The Form 1 is generally prepared by the Real Estate Agent but can also be prepared by your Conveyancer if they have suitable insurance. It is important that the Form 1 is accurate and complies with current legislation to avoid putting the contract at risk.
Why have a Form 1?
The Form 1’s purpose is to disclose to the purchaser the particulars of the property that may affect their purchase.
The purchaser should read this document carefully, so they understand all the particulars of the land. These include, but are not limited to:
- Cooling off rights
- Inquiries of the land, including mortgages, encumbrances, easements, lease and tenancy agreements
- Caveats and Liens
- Development Plans
- Emergency Services Levy
- Public and Environmental Health
- Water and Sewerage
It is recommended that Vendors and Purchasers contact a Conveyancer before they sign a contract, or in the cooling off period, to ensure that they understand what both the Contract and Form 1 mean, and how the disclosed information may affect them.
What is cooling off and when does it start?
Most Purchasers have a statutory right to terminate a Contract, but it must be exercised by giving written notice of the cooling off to the Vendor within two clear business days of the service of the Form 1.
The Form 1 is served on purchasers either in person, by fax or email.
In South Australia, settlement cannot occur within 10 days of the service of the Form 1 and not all Purchasers have the right to cool off.
No Cooling Off Period
If you have waived your right, by getting independent legal advice, bid at auction and purchase later that day, or you are purchasing as a company and you are buying commercial property, you do not have a cooling off period.
Not Proceeding with a Purchase
If a purchaser chooses not to proceed and gives notice during the cooling off period, it must be done correctly and in the manner that the Form 1 allows.
The cooling off period can be used to conduct a building or pest inspection to ensure that the Purchaser is happy with their decision.
Recently the Planning code amendments, brought in on the 19th of March 2021, have forced changes to be made to the preparation of the Form 1. The Form 1 now incorporates information in relation to the zoning changes, overlays and sub zones of the subject property, details of which can be found in the SAPPA Section 7 Report that will be attached to the Form 1. Additionally, information in relation to Aluminum Composite Panels and declared significant trees are now incorporated into the Form 1 (if applicable).
Strathalbyn Conveyancing highly recommend speaking with your Conveyancer in the early stages of signing a contract and in your cooling off period to ensure that all of your rights and obligations are protected.