Section 7 statements: Lagging behind legislative changes

In this article, we discuss responding common question that arises in relation to section 7 requests: What should a council do when the questions in the Form 1 have not kept pace with legislative change?

What are "Section 7 statements?"

As part of nearly all land sales to individuals (a small number of exceptions apply), the owner is required to provide to the purchaser certain prescribed information about the land. This obligation is found in Section 7 of the Land and Business (Sale and Conveyancing) Act 1994 (the LBSC Act). The information which must be provided must be in the form set out in Form 1 of Schedule 1 of the Land and Business (Sale and Conveyancing) Regulations 2010(the Regulations). This is what gives us the commonly used terms “Section 7 statement” and “Form 1”.

The owner is required to make inquiries of certain bodies in compiling this information, including the relevant council. The information the council is required to provide relates to a number of matters, including: rates, zoning, conditions of development authorisation, notices or orders issued in relation to the land.

The content of the Form 1

The questions in the Form 1 which must be completed by the council refer to no fewer than 14 different Acts (some of which have since been repealed, but which might continue to be relevant, such as an ongoing condition of a development authorisation under the Planning Act 1982, or a septic tank approval under the Public and Environmental Health Act 1987).

However, over time, as these Acts have been amended, or as new legislation has commenced, the Form 1 has not always been updated to reflect the change.

This means that some information which may be relevant to an incoming purchaser of land, and which is within a council’s knowledge, is not required to be included in council’s Form 1 response. Some of the examples that we have identified include:

• The Local Nuisance and Litter Control Act 2016 (LNLC Act), which commenced operation in February 2017, has not been included in the Form 1. This means that there is no requirement for a council to disclose certain actions it has taken under the LNLC Act, including the issuing of a noise or litter abatement notice, in a Form 1 response.

• The Burial and Cremation Act 2013 which, in Section 8(2) authorises the burial of bodily remains on private land outside of a township or Metropolitan Adelaide with the permission of the owner of the land and the relevant council. This too has not been included in the Form 1, meaning that there is no requirement for a council to disclose that such a permit has been issued in a Form 1 response.

• The Housing Improvement Act 1940 was repealed and replaced with the Housing Improvement Act 2016 in April 2017. However, the 2016 Act has not been included in the Form 1, which continues to only require councils to disclose information regarding declarations or notices issued under the 1940 Act.

• Land management agreements entered into pursuant to Section 57 of the Development Act 1993 (D Act) must be disclosed in a Form 1 response, but not those entered into pursuant to Section 57A of that Act. Further, make good orders issued by the Environment Resources and Development Court pursuant to Section 106A of the D Act, which can authorise a person (who may or may not be the owner of land) to enter onto and cross land to establish, nurture, protect and maintain certain trees have not been included in the Form 1, and so do not need to be disclosed in a Form 1 response. However, in both of these situations the obligation created by the LMA or Section 106A order will only pass to a future owner if the LMA or order has been noted against the certificate of title to the land, which ought to alert a future purchaser to its existence in any event.

These omissions may, at times, place councils in a difficult position, particularly where a purchaser would have a legitimate interest in the information, or where a council has spent a significant amount of money (i.e. in remediating a site) and wishes to recover its costs.

Until the Form 1 is updated to reflect these legislative changes, there is no easy answer to how to proceed in these situations.

Disclosing additional information not directly required in the Form 1 may open a council up to legal challenge, particularly if the information turns out to not be accurate, and causes the sale to fall over, or to proceed but at a reduced price. However, remaining silent may create a perception that the council is not acting in the best interests of its community, or may forgo its best chance of recovering its costs.

In short, each situation will very much turn on its own facts.

• In some cases, it may be possible to bring the relevant information to the attention of potential purchasers through other means. For example, the content of an undisclosed abatement notice under the LNLC Act might also be the valid subject of a Section 84 notice under the D Act.

• A council might request another party make a voluntary disclosure, such as the land owner or agent.

• In some limited cases, a bit of “legal magic” might be available in the Acts Interpretation Act 1915 to ‘make’ a reference to one Act (such as a repealed Act which is included in the Form 1) also include a reference to a new Act.

• Finally, there may be circumstances in which a council is comfortable not disclosing the information, simply because it is not legally required to, or because the information is available to the purchaser in another way, such as a notation on the certificate of title or charge on the land.