Table 1. Models of mandatory disclosure... | Emerald Publishing

Table 1.

Models of mandatory disclosure in real estate transactions

Model	Advantages	Disadvantages
General duty not to mislead or deceive	A general duty of disclosure can be tailored by the vendor and its agents towards the individual purchaser’s informational needs without the necessity of ex ante stipulation, which is likely to over or under-regulate what must be disclosed	Uncertainty regarding when disclosure or omissions of disclosure are misleading or deceptive can impede compliance and result in increased disputation A general duty not to mislead or deceive does not regulate the mode or timing of disclosure. The mode and timing of disclosure may be as significant as the contents of disclosure to the informational needs of purchasers
Duty to supply specific documentation (e.g. copies of certificates of title, planning consents, details of utilities infrastructure, strata scheme documents, regulatory notices, etc.)	Imposing a duty on a vendor to provide the purchaser with stipulated documentation ensures that the purchaser is aware of key matters affecting the property. Requiring the original documentation to be provided rather than a vendor-completed form also ensures that the relevant information is not “lost in translation”	This duty is heavily reliant upon the accuracy and comprehensiveness of information contained in the stipulated documentation. However, material information related to the property’s condition (e.g., the structural integrity of buildings) may not be included in the documentation To mitigate against under-inclusiveness, in some jurisdictions such as the Australian State of New South Wales, the duty to supply specific documentation is supplemented with mandatory warranties related to its accuracy – e.g. that there are no other proprietary interests other than what is contained in the certificate of title, that all buildings on the land comply with relevant planning consents, that the land is not subject to adverse possession, etc.
Duty to supply prescribed information (the “prescribed information model”)	Prescribing what must be disclosed makes vendor obligations clear and is, therefore, likely to reduce future disputation. It also provides guidance to purchasers regarding the type of information that should be considered when making purchasing decisions. Purchasers (especially one-off residential purchasers) may not otherwise know what information could affect the property’s amenity or value	The prescribed information may be over or under-inclusive of the informational needs of purchasers Extensive disclosure may be counterproductive if purchasers find it difficult to read and comprehend the information provided. This can be problematic if the cost of producing the information is high – suggesting that the costs of imposing an obligation to produce an extensive array of prescribed information may outweigh the informational benefits to purchasers

Model	Advantages	Disadvantages
General duty not to mislead or deceive	A general duty of disclosure can be tailored by the vendor and its agents towards the individual purchaser’s informational needs without the necessity of ex ante stipulation, which is likely to over or under-regulate what must be disclosed	Uncertainty regarding when disclosure or omissions of disclosure are misleading or deceptive can impede compliance and result in increased disputation A general duty not to mislead or deceive does not regulate the mode or timing of disclosure. The mode and timing of disclosure may be as significant as the contents of disclosure to the informational needs of purchasers
Duty to supply specific documentation(e.g. copies of certificates of title, planning consents, details of utilities infrastructure, strata scheme documents, regulatory notices, etc.)	Imposing a duty on a vendor to provide the purchaser with stipulated documentation ensures that the purchaser is aware of key matters affecting the property. Requiring the original documentation to be provided rather than a vendor-completed form also ensures that the relevant information is not “lost in translation”	This duty is heavily reliant upon the accuracy and comprehensiveness of information contained in the stipulated documentation. However, material information related to the property’s condition (e.g., the structural integrity of buildings) may not be included in the documentation To mitigate against under-inclusiveness, in some jurisdictions such as the Australian State of New South Wales, the duty to supply specific documentation is supplemented with mandatory warranties related to its accuracy – e.g. that there are no other proprietary interests other than what is contained in the certificate of title, that all buildings on the land comply with relevant planning consents, that the land is not subject to adverse possession, etc.
Duty to supply prescribed information(the “prescribed information model”)	Prescribing what must be disclosed makes vendor obligations clear and is, therefore, likely to reduce future disputation. It also provides guidance to purchasers regarding the type of information that should be considered when making purchasing decisions. Purchasers (especially one-off residential purchasers) may not otherwise know what information could affect the property’s amenity or value	The prescribed information may be over or under-inclusive of the informational needs of purchasers Extensive disclosure may be counterproductive if purchasers find it difficult to read and comprehend the information provided. This can be problematic if the cost of producing the information is high – suggesting that the costs of imposing an obligation to produce an extensive array of prescribed information may outweigh the informational benefits to purchasers

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