Full Disclosure Protecting Buyers and Sellers
Category Property Advice
When selling a home, it can be tempting to highlight its best features while sweeping any flaws under the rug.
However, failing to disclose known issues can have serious legal and financial consequences. With the implementation of the Property Practitioners Act in February 2022, it has become even more critical for sellers to practice full transparency.
Richard Gray, CEO of Harcourts South Africa, emphasises the importance of full disclosure in protecting both home sellers and buyers.
The Importance of Full Disclosure
"Transparency is key in real estate transactions," says Gray. "Failing to disclose known defects not only risks legal action but can also lead to costly repairs and disputes down the line."
- Legal Requirements: The Property Practitioners Act mandates that property practitioners obtain a 'disclosure form' from sellers before concluding a mandate and provide it to purchasers before they make an offer. This form details any known defects or issues with the property, ensuring buyers are fully informed.
- Protecting Sellers: "Full disclosure protects sellers from future legal claims," notes Gray. If a buyer discovers undisclosed defects after the sale, they may seek compensation or legal action against the seller. Disclosing all known issues upfront can prevent such disputes.
- Building Trust: Transparency fosters trust between buyers and sellers. When buyers feel confident that they have all the necessary information, they are more likely to proceed with the purchase and less likely to back out or negotiate lower prices later.
Common Issues to Disclose
Sellers should be forthcoming about a range of potential issues, including but not limited to:
- Structural defects
- Plumbing or electrical problems
- Pest infestations
- Previous renovations or additions
- Boundary disputes
- Environmental hazards
The Role of Real Estate Agents
Real estate agents play a crucial role in ensuring full disclosure. "Agents are now legally obligated to obtain and share the disclosure form with potential buyers," explains Gray. This added layer of accountability helps ensure that all parties are informed and that transactions are conducted fairly and transparently.
Steps for Sellers
Gray offers practical steps for sellers to ensure they meet disclosure requirements:
- Complete the Disclosure Form: Fill out the disclosure form accurately and honestly. Include all known issues, no matter how minor they may seem.
- Hire a Professional Inspector: Consider having a professional inspection before listing your property. This can identify any issues you might not be aware of and allow you to address them proactively.
- Document Repairs and Upgrades: Keep records of any repairs, renovations, or upgrades you've made to the property. Providing this information can reassure buyers and demonstrate that the home has been well-maintained.
- Work with a Reputable Agent: Choose a real estate agent who is knowledgeable about the Property Practitioners Act and committed to ethical practices. "A good agent will guide you through the disclosure process and ensure all legal requirements are met," says Gray.
Author: Harcourts SA
