Our Legal Blog in Cardiff, Morisset & Lake Macquarie

Selling a property in New South Wales (NSW) requires careful legal compliance to protect both the vendor and the buyer. Vendors must meet disclosure obligations, provide a valid Contract for Sale, and ensure they do not misrepresent the property’s condition. Failing to adhere to these requirements can lead to contract termination, financial penalties, or legal disputes. Below, we explore these critical aspects in detail. 1. Preparing a Contract for Sale Before a property can be marketed, the vendor must have a Contract for Sale of Land prepared. This requirement is set out under section 66R of the Conveyancing Act 1919 (NSW), which makes it illegal to list a property for sale without a valid contract. The contract must be prepared by a solicitor or licensed conveyancer and made available to prospective buyers before advertising or showing the property. Essential Documents in the Contract The Contract for Sale must include: - Title Search: A current title search from NSW Land Registry Services, which confirms ownership details and discloses any encumbrances, such as mortgages, easements, or caveats. - Zoning Certificate (s 10.7 Certificate): Issued by the local council, this certificate provides details on how the land is zoned and any planning restrictions that may apply. - Drainage Diagram: A document from Sydney Water (or the relevant local water authority) showing the location of sewer and drainage pipes, helping buyers assess potential plumbing issues. - Property Certificates: If the property is part of a strata scheme, the contract must include a strata plan and information about strata levies, by-laws, and the building’s financial health. - Swimming Pool Compliance Documents: If the property has a swimming pool or spa, the contract must include either a Swimming Pool Compliance Certificate or a valid Occupation Certificate to confirm the pool meets safety regulations under the Swimming Pools Act 1992 (NSW). Failure to include these documents can give buyers the right to withdraw from the contract during the cooling-off period. Vendors should work closely with a legal professional to ensure the contract is properly drafted and legally compliant. 2. Disclosure Requirements NSW law places a legal duty on vendors to disclose certain material facts about the property to prospective buyers. These requirements are outlined in the Conveyancing (Sale of Land) Regulation 2022 (NSW). Material Facts That Must Be Disclosed Under Schedule 1, Clause 3 of the Conveyancing (Sale of Land) Regulation 2022, a vendor must disclose if the property: - Has been the site of a serious violent crime (such as a murder) in the past five years. - Is subject to flooding, bushfire risk, or landslip hazards that could impact its safety or value.- - Contains loose-fill asbestos insulation, which is a serious health risk. - Has been declared contaminated land under the Contaminated Land Management Act 1997 (NSW). - Is part of a strata scheme where a major building defect has been identified in an engineer’s report. These disclosures must be made honestly, as failing to disclose material facts may allow a buyer to terminate the contract or seek compensation. Vendors should be proactive in obtaining reports and assessments to ensure full transparency in the sale. 3. Vendor Warranties and Defects When selling a property, vendors provide statutory warranties under the Conveyancing (Sale of Land) Regulation 2022 (NSW). These warranties guarantee that certain aspects of the property’s legal status are in order. Key Vendor Warranties Under Schedule 3 of the Conveyancing (Sale of Land) Regulation 2022, the vendor warrants that: They legally own the property and have the right to sell it. There are no undisclosed encumbrances (such as easements, covenants, or caveats) that would restrict the buyer’s use of the property. There are no government proposals to acquire the property for public works, such as road widening or infrastructure projects. The land is not affected by zoning breaches or unlawful structures, meaning there are no outstanding council notices requiring demolition or modification. Defects and Buyer Protections If a buyer discovers a breach of vendor warranties, they may be entitled to: Rescind (cancel) the contract before settlement if the breach is significant. Seek compensation if the issue affects the value or usability of the property. Take legal action under the Australian Consumer Law (Competition and Consumer Act 2010 (Cth)) if the vendor’s representations about the property were misleading or deceptive. To avoid potential disputes, vendors should conduct a thorough review of their property’s compliance before listing it for sale. This may involve obtaining building inspections, resolving outstanding council issues, and ensuring any unauthorised structures (such as extensions or granny flats) have the necessary approvals. Conclusion Selling a property in NSW is not just about finding a buyer—it requires strict legal compliance. Vendors must ensure they have a properly prepared contract, meet disclosure obligations, and provide statutory warranties. Failing to comply with these requirements can lead to serious consequences, including contract termination or legal disputes. To navigate the complexities of property sales, vendors should engage an experienced solicitor or licensed conveyancer early in the process. A legal professional can ensure all documents are in order, help identify potential risks, and provide guidance on meeting statutory obligations—ultimately leading to a smoother and legally sound transaction. Contact us on (02) 4954 8666 and have a chat today!