When navigating the world of real estate, transparency and honesty are essential. A crucial component of this is the Property Conditions document, which aims to protect both buyers and sellers from costly obstacles. 

With the updated Property Conditions Act, there are a few changes that sellers and property professionals need to be aware of to ensure a fair and honest transaction process. In this article, our RE/MAX Living team guides you through everything you need to know to stay compliant and protect your interests.

What Is a Mandatory Property Conditions Document?

A Mandatory Property Conditions document is a legally binding form that sellers must complete before their property can be listed. It ensures full transparency by requiring sellers to disclose any defects or issues with the property.

There are two types of defects sellers must disclose:

  • Patent defects: These are obvious issues that can be spotted when viewing the property, such as cracks in the walls or ceilings, broken tiles, and rusted gutters.

  • Latent defects: These are hidden problems that aren’t immediately apparent and may only be discovered over time, such as poor waterproofing, faulty plumbing systems, or electrical writing issues.

As of February 2022, this document must be signed by the seller and an authorised representative before the property can be listed. Every prospective buyer must also get a copy of the property’s Conditions document.

What Happens If You Don’t Have a Property Conditions Document?

Although some agencies or listing platforms will allow properties to be displayed without the Conditions documents, there are a number of risks associated with this. 

The biggest risk is that, by not completing or providing this document to prospective buyers, sellers are implying that their property is free of defects and being sold in perfect condition. If any issues pop up, the seller can be held liable, which can lead to serious financial implications.

The Property Practitioners Regulatory Authority can also impose fines on the seller for violating a legal act. By completing the Property Conditions document, the seller indemnifies themselves from these issues. 

Tips For Setting Up A Property Conditions Document

When creating a Property Conditions document, honesty is always the best policy. Not only does this ensure a fair and honest transaction, but it also reduces the risk of costly obstacles in the future.

Here are a few key questions and considerations to make when setting up a Property Conditions document:

  • What is the condition of the property? Be clear and specific about any issues. 

  • Are any tenants currently occupying the property? Ensure that you plan around their move-out dates to avoid legal trouble. 

  • What will remain in the property and what will be removed? Be specific to avoid any issues later on. 

  • What is your ideal move-in and move-out timeline? This helps to align your expectations with those of prospective buyers.

Once you’ve completed the document, it’s important to take the right steps to ensure it remains valid. Small overlooked details can invalidate an agreement, which can cause issues in the future. Here’s how to ensure your agreement is valid:

  • Use wet ink: Digital signatures can sometimes invalidate property contracts. Always sign in wet black ink to be safe.

  • Initial everything: Ensure every page and any changes are signed with an initial.

  • Check dates: Date your signature clearly. All follow-up actions—such as deposits or bond payments—must align with this date.

  • Verify authority to sign: Ensure you have the legal authority to sign the document, especially for properties owned under trusts or companies. Incorrect resolutions or documentation can lead to delays in processing the transaction.

Smooth Transactions, Every Time with RE/MAX Living 

Property transactions—especially high-value or luxury ones—can be complex. That’s why you need an agent that you can trust with every step of the process.

Our team of experienced agents are committed to helping you sell your property or find your dream space. Trust RE/MAX Living to guide you through every step of the way, ensuring full compliance and a hassle-free process. Visit our website for more, today.