Outdated Form 1s, why you shouldn't rely on one ordered 3 months ago
We are frequently asked this question so let’s first look at what a Form 1 is.
Form 1 is the formal statement served on a Purchaser which provides details of the property being transferred and delivers the Purchaser their cooling-off rights. The Form 1 accompanies a contract of sale and is a legislative requirement.
Agents want to secure a sale for you as quickly as possible.
Many Agents prefer to order searches early and have the Form 1 ready to go shortly after the property is listed so it is available when open inspections commence. The Form 1 can then be served immediately after a sale contract has been accepted by all parties; enabling them to secure that sale as quickly as possible.
A Form 1 can become outdated
On occasions, sale contracts fall over or the property does not sell for extended periods of time which can result in the information contained within a Form 1 becoming outdated.
Other common factors that can cause outdated or even defective Form 1s are:
- The commencement of the new financial year
- A new rating quarter commencing as Councils, SA water and other Government departments update their information every quarter
A thorough and comprehensive Form 1 will stipulate all of the outstanding balances which will be satisfied prior to or at settlement and it needs to be correct at the time of service. If the facts and figures stated in the Form 1 are outdated, there is a great possibility the Form 1 could be considered defective.
Searches can be updated at no additional cost to you
Many of the searches can be updated within a 3 month period at no additional cost. However, some Councils will charge for updated rates information within that initial 90 day period. Once a new financial year begins, Councils and government departments are more likely to charge for providing their updated information or may require a completely new search to be ordered. It is only natural that a vendor may be alarmed by the costs associated with the requirement for updated or fresh searches, especially if they are not familiar with the importance of the information contained within the Form 1.
What if I have defective Form 1?
It is important to keep in mind that a defective Form 1, if left unresolved, gives the purchaser the ability to cool off at any stage prior to settlement. While frustrating, any additional costs required to update searches to ensure an accurate Form 1 can be served is a small price to pay in comparison to a purchaser pulling out of a contract on the day of settlement due to a defective Form 1.
Article written by Tammy Edwards | Hero Image by Pexels
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Tuckfields does not take responsibility for any errors or omissions obtained from the use of this information.