The UTA2010 requires 3 disclosure statements to be given by the seller of a unit to a buyer of a unit. These are:
• The pre-contract disclosure statement – to be given before an agreement for sale and purchase is entered into
• The pre-settlement disclosure statement – to be given no later than 5 working days before settlement
• The additional disclosure statement – to be given if requested by a buyer
The form and content of these disclosure statements will be prescribed by the regulations to the UTA2010, which are still being finalised.
If the pre-settlement disclosure statement or the additional disclosure statement is given late (or not at all) a buyer of a unit may elect to postpone the settlement date or cancel the agreement for sale and purchase. The UTA2010 does not give a buyer of a unit the right to cancel or delay settlement if the content of the disclosure statement alarms a buyer – this will be an issue buyers will want to cover in their agreements for sale and purchase.
The standard ADLS/REINZ agreement for the sale and purchase of real estate will be updated to deal with the UTA2010, including, we expect, these disclosure issues.
However, existing agreements for sale and purchase on foot when the UTA2010 commences might still be caught by the disclosure requirements. If there are more than 5 working days until settlement when the UTA2010 commences then sellers will need to consider these requirements. If long settlements are contemplated in agreements being prepared now, give this some thought.
By Denise Marsden