You may not have heard of a Form 1, but when it comes to buying and selling property in South Australia, you can’t complete the transaction without it.
If you’re selling a South Australian property and are wondering why the Form 1 is such a critical step in your sale-to-settlement process, we’ve answered some key questions for you.
What is a Form 1?
If you’re a seller, you must supply a Form 1 vendor disclosure statement to your buyer(s) to finalise the property transaction.
Your real estate agent will help you with this.
When you have a copy of the completed Form 1, it’s easy to upload it to Conveyancing.com.au, so we can help you complete your property transaction safely and securely.
Why do you need a Form 1 to finalise your property transaction in South Australia?
For any property being sold in South Australia, the property transaction cannot be legally completed without an accurate Form 1.
The form reveals key information about the property being transacted and access to this information is a vital part of the checks and balances needed to ensure a safe, secure settlement for everyone involved.
How do you get a Form 1?
The Form 1 is usually provided and prepared by your real estate agent but can also be obtained from the SA Integrated Land Management System (SAILIS) website.
What information do you need to include on a Form 1?
The Form 1 will disclose particulars about the property being sold that may affect the buyer’s decision to commit to the purchase. For that reason, filling it in accurately and getting legal advice that it is correct is an important part of the legal process that helps settlement happen successfully.
The Form 1 comprises:
- An explanatory statement detailing the purpose of the form;
- The particulars of the parties and the land being sold;
- An explanation of the buyer‘s cooling-off rights;
- A statement by or on behalf of the seller;
- A certificate by or on behalf of the agent or the authorised representative verifying the information in relation to the land, as set out in the form;
- A summary of all mortgages, charges and encumbrances affecting the land including any easements and/or restrictive covenants;
- A summary of particulars in relation to several prescribed matters and whether they affect the land, such as planning and development matters, heritage and, where applicable, strata and community corporation matters.
Several updates have been made to the disclosure requirements set out in the Form 1 in recent years. Ensuring that the Form 1 is prepared using the most up-to-date version is vital to avoiding mistakes.
In South Australia, property buyers have a two-day cooling-off period and can withdraw from the sale contract at any time during the first two clear (that is, full and complete) business days after they have been ‘served’ the Form 1.
There is a direct connection between the accurate information about the property that must be included on the Form 1 and this cooling-off period.
Who handles filling out a Form 1?
It is the seller’s real estate agent who holds the responsibility for preparing the statement – but the seller themselves must ensure that they provide accurate information for the agent to include (see above for more information about the cooling-off period and disclosure).
The seller (or their agent, if they are using one) is also responsible for serving the Form 1 on the buyer. It must be served personally or sent to the buyer’s address by registered post.
Do you need a Form 1 for both private sales and auctions?
Any South Australian residential property transaction requires a Form 1.
For properties selling via auction, the seller (or their real estate agent representative) needs to make sure that the Form 1 is available to the public at the real estate office involved in selling the property, or the office of the auctioneer, for three (3) full business days prior to the auction.
The Form 1 must also be available for a minimum of 30 minutes before the auction takes place, on-site where the auction takes place.
What happens when a Form 1 is completed?
When the Form 1 is completed, what happens next depends on whether the property is selling by auction or private sale. As mentioned above, anyone selling at auction must make the Form 1 publicly available at either the office of the auctioneer or the real estate agent involved for a full three (3) business days before the auction date. On the date of the auction itself, the Form 1 must be available on-site for at least 30 minutes before the auction takes place.
When the contract has been signed, the Form 1 must be delivered to the purchaser at least 10 clear (defined as “full and complete”) days before the agreed settlement date. Because there are serious legal and financial consequences if the Form 1 is not correctly served on the buyer, it’s important to get the buyer’s signature – by either delivering in-person or via registered post – to prove that the Form 1 has been received.
If you’re a buyer and have signed the contract, legal advice from your trusted conveyancing team is critical to ensure that all the information contained in the Form 1 schedule is correct and agreed to.
If your conveyancer finds any concerns, it’s important to remember that you can exercise your cooling-off rights – but only within the first two days following the receipt of the Form 1.
What are the consequences of not completing the Form 1 properly?
If any inaccuracies are found in the Form 1, it is deemed to be defective and will not trigger the standard cooling-off period.
Sellers: A seller can amend the Form 1 to rectify any mistakes that may have been made, but the cooling-off period will only begin on the date the corrections are completed.
Buyers: If the buyer has settled the property but was not provided with a valid Form 1, or if the Form 1 was not right, there is recourse available.
Applying to a Court to have the contract set aside, is one option a buyer can take – and they may be awarded damages.
Under South Australian law, it is a criminal offence not to supply a Form 1 disclosure statement to the purchaser at least 10 days prior to settlement. It is also an offence if the Form 1 that is served is not correct or incomplete. These offences are punishable by a significant fine – up to $10,000.
Our experienced conveyancers support your sale-to-settlement journey
If the Form 1 information seems complicated, don’t worry. With an experienced conveyancing team to help ensure all the correct legal steps are managed carefully, you’ll be protected – whether you’re the buyer or the seller.
For more information, our conveyancing team can answer your questions. Contact Conveyancing.com.au today on 1300 932 738.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.