Form 1: What is it?
The Form 1 (Vendors Disclosure Statement) is the formal statement that must be served on the Purchaser and provides the cooling off rights and certain details relating to the property being sold. It is required under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994.
A Form 1 is normally done by the real estate agent but your conveyancer can also complete the Form 1 for you if they have suitable insurance. It is important that the Form 1 is accurate and complies with relevant legislation as there is a risk that it will be considered defective if it is not completed correctly which puts the contract at risk. This is a potential problem for the vendor who may lose the sale and/or have default charges claimed due to the inaccurate information. By requesting your conveyancer to do the Form 1 they will carefully read through/conduct searches to ensure that all information is provided and the Form 1 is completed correctly.
The purpose of the Form 1 is to make the purchaser aware of any particulars with the land that could affect their purchase. It is in the purchaser’s best interest to read through it so they understand all the particulars concerned
“put you on notice of certain particulars concerning the land to be acquired”
Particulars noted in Form 1 include but not all:
- Cooling off rights (see FAQ’s What are cooling off rights?)
- Inquiries of the land eg mortgages, encumbrances, easements, lease agreements, tenancy agreements,
- Rights to lien a right to keep possession of property belonging to another person until a debt owed by that person is discharged.
- Development plans
- Emergency service funding
- Public and environmental health
If you intend to carry out building work on the land, change the land or divide the land you should make further inquiries to determine whether this will be permitted. For example, building work may not be permitted on land not connected to a sewerage system or common drainage scheme if the land is near a watercourse, dam, bore or the River Murray and Lakes.
It is always in the purchaser’s best interest to speak to a conveyancer either BEFORE they sign the contract or at least in the cooling off period to ensure that they understand what both the Contract and Form 1 mean and how the all the disclosed information affect them.Back