Mandatory disclosure: a practical guide for small agencies
Since the Property Practitioners Act came into force in February 2022, the mandatory disclosure form has become part of every sale. Most agents know the rule. Fewer have a good routine for actually going through the form with a seller.
This is practical guidance from an agency point of view, not legal advice. For anything unusual, speak to a conveyancer or the PPRA.
The rule in short
Under section 67 of the Act, a property practitioner may not accept a mandate unless the seller has given them a completed and signed disclosure form. A copy must be given to the buyer and attached to the sale agreement.
If no disclosure form is attached, the agreement is read as if the seller disclosed no defects at all. That is a bad position for everyone, including the agent.
Why "tick and sign" isn't enough
The form asks the seller about things like:
- Roof leaks and damp
- Electrical, plumbing and drainage problems
- Boundary walls and encroachments
- Alterations made without approved building plans
- Problems with the borehole, pool or septic tank
Many sellers have lived in a house for twenty years and genuinely don't think of the damp patch behind the cupboard as "a defect". If you hand them the form and walk away, you get a form full of "no" answers and a problem waiting for the buyer.
Go through it together
Walk the house first
Ask your questions room by room, not line by line. "Has the roof ever leaked here? Who fixed it?" gets better answers than a form at the kitchen table.
Ask about the paperwork
Approved plans, electrical certificate, previous repairs, the beetle report. A seller who knows where these are will have an easier transfer.
Write down "unsure"
If the seller doesn't know, say so on the form rather than ticking "no". An honest "unsure, the previous owner built the outside room" protects the seller far better than a guess.
Give the buyer a copy early
Share the signed form before the offer, not at signing. Buyers who know about the damp patch don't renegotiate at transfer.
A good disclosure doesn't scare buyers away. Surprises do.
A checklist you can print
We made a free defect disclosure checklist with the questions to go through with a seller before they sign. Print it, take it to your next listing appointment, and keep a copy on file.
In ErfFind, the signed disclosure lives on the listing with the mandate and the rest of the documents, so nobody in the office has to hunt for it at transfer. If you'd like to see how, book a free demo.
