Getting disclosure statements right
When selling a residential or commercial property within a Community Title Scheme (CTS), sellers must provide a disclosure statement in accordance with Section 206 of the Body Corporate and Community Management Act 1997 (BCCM Act) prior to the buyer signing a contract.
The disclosure statement includes information about the body corporate, including applicable fees and related responsibilities for the buyer.
The agent usually sources the information from their client and the relevant body corporate, and in some cases may even be provided with a completed disclosure statement from the body corporate.
It is important for agents to understand how to complete and provide a disclosure statement. Under s206, a buyer can terminate a contract if the disclosure statement:
- is not signed by the seller and provided to the buyer before they enter the contract;
- is not substantially complete; or
- does not contain the required information under the section.
If an agent has any concerns about the completeness of the statement, they should direct their client to seek legal advice.
PROVIDING THE DISCLOSURE STATEMENT
Once a completed statement is ready, the agent must ensure the correct process is followed so that the buyer receives a signed copy of the statement before entering into the contract.
To assist agents, Realworks has developed a feature which allows disclosure statements and contracts to be sent for signing in DocuSign according to a routing order. The order is:
- The disclosure statement goes to the seller to sign first;
- The disclosure statement signed by the seller with the unsigned contract goes to the buyer to sign both documents;
- The documents then go back to the seller to sign the contract; and
- Once the contract is fully signed, a copy is sent to both parties.
This process must also be followed if signing manually or via another electronic signing platform.
The REIQ recommends using the routing order in Realworks to take any confusion out of the signing process and to ensure compliance with the BCCM Act.
In Realworks, users can check the signing status of the forms after they have been sent. Once completed, DocuSign will provide the option of downloading the signed document.
Once your contract is finalised you can send a compliant CTS Contract to the seller and buyer without worrying about the routing.
Realworks users can find out more about this process in the Realworks Help Guide. If you haven’t already, sign up to Realworks today and register for a free trial!
Check-out other helpful property sales articles including how to ensure your property contract’s special conditions are sound.
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