Disclosure Obligations When Selling Property Australia: Key Rules

Selling residential property in Australia involves more than setting a price and finding a buyer. Sellers are bound by legal disclosure obligations that, if ignored or mishandled, can lead to cancelled contracts, costly legal disputes, or claims for compensation. Whether selling a house, apartment, or strata title, understanding what you must disclose by law is essential for a legally compliant and stress-free transaction.

This guide explores Australia’s vendor disclosure laws across different states, what sellers must reveal, and how platforms like Legal Finda help connect sellers with qualified property lawyers to navigate these complexities.

What Are Disclosure Obligations?

Disclosure obligations refer to the legal requirement for property sellers (vendors) to provide accurate and complete information about the property’s condition, title, and any issues that could impact the buyer’s decision. These obligations are state-specific, and failing to meet them can render a sale voidable or expose the seller to misrepresentation claims.

Why Disclosure Matters

From the buyer’s perspective, disclosure helps prevent post-sale surprises—such as finding out the property has unapproved structures, is under a heritage overlay, or has ongoing disputes with neighbours or local councils. For sellers, compliance protects against litigation, builds trust with buyers, and ensures a smooth conveyancing process.

In fact, a 2023 case in Victoria saw a seller forced to refund the full purchase price after failing to disclose an unregistered easement. Courts found the omission materially affected the buyer’s decision and amounted to misleading conduct under Australian Consumer Law.

Legal Requirements Vary by State

Australia’s disclosure framework varies significantly across jurisdictions:

Victoria: Section 32 Vendor Statement

In Victoria, the Sale of Land Act 1962 (VIC) mandates that sellers provide a Section 32 statement before the buyer signs the contract. This document must include:

• Title details (e.g. covenants, easements)
• Planning information (zoning, overlays)
• Services connected (water, gas, electricity)
• Owners corporation details (if applicable)
• Building permits issued in the last 7 years
• Bushfire or flood risk zones
• Notices or orders affecting the land

Failure to provide a valid Section 32 can entitle the buyer to rescind the contract before settlement.

New South Wales: Contract Disclosure Rules

NSW sellers must attach specific prescribed documents to the contract, per the Conveyancing (Sale of Land) Regulation 2017, including:

• Title search & plan
• Sewerage diagram
• Zoning certificate (Section 10.7)
• Restrictions (easements, covenants)
• Swimming pool compliance certificates (if relevant)

If any prescribed document is missing, the buyer may have the right to rescind the contract within 14 days or before settlement, even without a cooling-off period.

Queensland: Buyer Beware System

Queensland operates under a “buyer beware” model. While sellers are not required to proactively disclose as much as in other states, they must still:

• Answer buyer questions honestly
• Disclose known defects that may affect value
• Provide a Body Corporate Disclosure Statement for strata properties
• Disclose material facts that, if withheld, could be misleading

Failure to disclose critical issues can still breach Section 18 of the Australian Consumer Law or the Property Occupations Act 2014 (QLD).

Western Australia, South Australia, Tasmania, ACT

These states have varying levels of statutory disclosure. Most require title details, zoning, and known encumbrances, with additional obligations in strata or community title contexts. ACT, for instance, mandates a comprehensive disclosure document similar to Victoria’s Section 32.

What Must Be Disclosed? A Practical Checklist

Regardless of the state, vendors are generally expected to disclose the following, where applicable:

Title Defects and Encumbrances

• Easements
• Covenants
• Caveats
• Mortgages (to be discharged on settlement)

Planning and Zoning Information

• Heritage overlays
• Future development zones
• Planning permits affecting the land

Unapproved Building Work

Sellers must disclose structures built without permits or approvals. Buyers may be able to rescind the contract or claim damages if post-settlement issues arise.

Material Defects

• Pest infestations
• Structural faults
• Flood or bushfire risk
• Mould or asbestos

These issues may fall under “material facts” and, if withheld, can amount to misleading or deceptive conduct.

Strata and Owners Corporation Information

For units, townhouses, or apartments:

• Strata levies
• Special levies or disputes
• Minutes of recent AGMs
• Upcoming capital works

Legal Notices or Disputes

• Fencing disputes
• Notices from councils or utilities
• Legal claims involving the property

Sellers who “don’t ask, don’t tell” risk being liable under the Australian Consumer Law for deceptive conduct—even if they weren’t directly asked.

What If Sellers Don’t Disclose?

Failing to meet disclosure obligations can result in:

• Contract rescission: Buyers may cancel before settlement.
• Legal action: Misrepresentation or deceptive conduct claims under ACL.
• Financial loss: Refunds, compensation, and legal costs.
• Reputation damage: Especially for investors or property developers.

A common misconception is that if the buyer signs a waiver or proceeds “as-is,” the seller is immune. However, waivers do not override statutory obligations. Courts have consistently upheld that if a seller knew (or should have known) a defect materially affected value or usability, they had a duty to disclose it.

Real-Life Case Examples

NSW, 2021: A buyer successfully terminated a contract after discovering an easement affecting future renovations that was not attached in the contract’s prescribed documents.

VIC, 2022: A seller failed to mention that a rear extension lacked a building permit. After settlement, the council issued a demolition notice. The buyer sued and received $85,000 in damages.

QLD, 2023: A seller advertised a property with a “newly renovated bathroom,” but the waterproofing had not been certified. After water damage, the buyer lodged a successful claim under ACL for misleading advertising.

The Role of Buyer Questions and "Material Facts"

A common theme in disputes is the seller’s response to direct questions. If a buyer asks, for example, “Has the house ever had termite issues?” and the seller gives an untruthful or vague answer, they could be legally liable, regardless of what the contract says.

In several states (including NSW and VIC), sellers are also required to proactively disclose “material facts”—information that would affect a reasonable buyer’s decision.

The NSW Government defines a material fact as anything that:

"Would be important to a reasonable purchaser in deciding whether to purchase the property."

Examples include:

• Known flood history
• Previous use as a meth lab
• Past homicides or suicides
• Structural movement issues

Common Mistakes Sellers Make

Despite the legal framework, sellers often fall into traps such as:

• Assuming old repairs don’t need to be disclosed
• Believing verbal disclosures are enough
• Relying solely on agents to handle disclosure
• Overlooking strata issues or building approvals

Each of these errors can be costly. As many legal professionals highlight, even well-intentioned sellers can face legal action if they don’t meet formal disclosure requirements.

How to Comply with Confidence

To meet legal requirements and protect your sale:

Engage a Property Lawyer Early

A solicitor or conveyancer ensures your contract and disclosure documents meet the minimum legal threshold. If you’re unsure about how to find a good property lawyer, Legal Finda connects you with trusted experts who can review titles, identify encumbrances, and prepare compliant vendor statements.

Don’t Rely Solely on Agents

While real estate agents are trained in disclosure rules, they are not legal advisors. The seller is ultimately responsible.

Disclose in Writing

All material facts and known issues should be documented clearly, preferably within the contract or vendor disclosure documentation.

Order Building and Pest Inspections

If unsure about the property's condition, ordering your own pre-listing inspections allows honest disclosure and avoids disputes.

Use Legal Finda to Connect with the Right Experts

Legal Finda simplifies the process of finding qualified property lawyers or conveyancers in your state who specialise in residential real estate sales. From preparing compliant documents to advising on complex title issues, a Legal Finda partner ensures you're protected at every stage.

Conclusion: Disclosure Is Not Optional—It’s Essential

Selling a property in Australia is not just a financial transaction; it's a legal contract governed by strict statutory requirements. Failing to meet disclosure obligations can lead to delays, disputes, and serious financial and legal consequences.

Sellers who disclose fully and transparently not only protect themselves but also increase buyer confidence and improve transaction success rates. With each state having its own rules, the safest and most efficient path is to work with a qualified legal professional.

Legal Finda connects property sellers with trusted legal experts who understand disclosure laws in your region, so you can move forward with confidence and peace of mind.