So you’re selling your house or commercial property… Among the multitude of other things there are to think about when going through this process, there’s something called a Form 1 that needs to be completed. Not sure what it is or what it should include? We can help!
Let’s find out a little more about the Form 1 and what it entails.
What is a Form 1, and why do we need to complete it?
The Form 1 is a document that needs to be completed by the vendor and provided to the purchaser of a property. It is required under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994, and is provided to ensure the purchaser is aware of any information that could negatively impact the value of the property.
The types of disclosures that are included in this Form might consist of things such as known defects, buildings that contain asbestos (commercial properties only), unusual easements, covenants or encumbrances, restrictions on land use, and details of any other parties that might have interests in the land.
When does the Form 1 need to be completed?
The timing of when the Form 1 is produced depends on whether you are selling the property at auction or on the open market.
Where a property is being sold at auction, both the Form 1 and the contract must be completed and available for viewing at the real estate agent’s office at least 3 working days prior to the auction, as well as for 30 minutes at the site on the day of the auction.
In other circumstances, the Form 1 must simply be provided to the purchaser at least 10 working days before the settlement day. In these instances, the provision of the Form 1 effects when the cooling off period commences and finishes. The cooling off period commences the day after the signing of the contract, or the service of the Form 1 (whichever is the latter). Our recommendation would be to complete the Form 1 before the signing of the contract because when selling a house time can mean money, so the sooner someone decides to cool off, the quicker you will be able to find an alternative buyer.
What happens if I don’t complete the Form 1?
The Form 1 is mandatory when selling a house, and failure to comply with the Act can result in serious penalties for both the vendor and the party responsible for completing the Form 1. This could be in the form of a fine of up to $10,000, the payment of damages if there were any issues that the purchasers were not made aware of, and the purchaser has a right to cool off at any point before the settlement date, not just in the usual two day period.
How do I complete the Form 1?
When it comes to actually completing the Form, it is best to leave it to the professionals. Often a real estate agent would put you in contact with a conveyancer who can assist you with the Form but you can also choose your own if you prefer.
To get the Form 1 completed, the conveyancer will work with you, and any other necessary parties, to ensure that the information is completely correct. When the Form is completed, the conveyancer completing it on your behalf must verify that all the information is true and correct. After making the relevant verification checks, they will complete a certificate (known as the Part D Certificate), which is provided to the purchaser along with the Form 1.
It is recommended to have the conveyancer you choose to complete your settlement also be the person you engage to prepare the Form 1. This will save costs for you when rates searches need to updated for the purpose of settlement statement preparation.
Has all this information left you feeling confused? Perhaps going back and reading our previous post on conveyancing jargon will help, but we are also here to assist you if you need. Simply give us a call on 08 7226 8033 and we can discuss your personal situation.
The comments above are of a general nature only and are not intended to be, and should not be regarded as, legal advice. For legal advice on your specific circumstances, you must consult a suitably qualified professional advisor.