The most common question we are getting from Queensland agents at the moment is "How long does a Form 2 stay valid for?”. The answer isa little bit scary: technically the Form 2 is out-of-date the moment it is issued. But it’s really not that scary!

One of the fundamental things about vendor disclosure is that itis generally taken to be given at the time when a purchaser signs the contract for sale – which will generally be some period of days, weeks or even months after the disclosure was originally put together.

But during the ‘disclosure gap’ things may change.

Council zoning or property classifications may be amended.

Transport authorities, environmental agencies or council may issue material notices affecting the property which ought to be included in the Form 2.

And while it would be relatively unique, new easements, covenants or encumbrances may be registered against the property, making the title search and plan of the land inaccurate.

If any of this happens and the Form 2 is not updated, a buyer will likely have a right of rescission, right up until the date of completion.

So what do we do?

Firstly, what we don’t do it update the Form 2everyday of the campaign. While that would provide theoretically perfect disclosure, it would be commercially unfeasible – and in reality not necessary except in some very remote cases.

Instead, we take a risk-based approach.

The first risk is essentially, the older the Form 2 is, the more likely that it needs to be updated. Based on market convention adopted in NSW for a similar disclosure regime, we think that 6 months is a ‘good rule of thumb’ when it comes to needing to update a Form 2. This doesn’t mean you wouldn’t turn your mind to updating the Form 2 earlier if certain circumstances warrant it. For example, it may become common knowledge that a particular Council is re-zoning areas near where the property is located; this would put us on notice that we might need to conduct a new zoning search.

Certain structures on the property might appear on the face of it to potentially not be council approved. This would elevate the risk that relevant notices from Council might have been issued after the Form 2 was provided, in which case an updated notices search may be warranted.

And of course the Vendor may have actually received a notice from a Transport Authority, the EPA or Council recently which would need to be added to the Form 2.

It does sound very uncertain and scary but the reality is that Dott & Crossitt have been managing this disclosure in the states of NSW and Victoria for the last 10 years and have developed systems and formulas to be able to know when a disclosure document might warrant updating.

If you have any further questions about this or any other aspect of the Form 2 regime please get in touch.