Who drafts your disclosure document?

Two different documents, often confused

When a vendor or buyer hears "disclosure statement" in NZ, they may be talking about one of two very different things:

• Statutory pre-contract and pre-settlement disclosure statements — mandatory, but only for unit title properties (apartments, townhouses, some flats). Required under the Unit Titles Act 2010. Content is largely prescribed; the vendor must provide them to the purchaser at defined stages of the sale.
• Agent-drafted disclosure documents — common for standalone houses and not required by statute. Produced by the agency to manage obligations under Professional Conduct Rule 10.7 (licensee's duty to disclose known defects to prospective purchasers) and to reduce the agency's own liability. Content is agency-drafted; the vendor signs; the vendor carries the liability for what is disclosed or omitted.

Most of the "disclosure friction" in NZ residential sales arises from the second category. This guide is primarily about those documents.

The statutory regime for unit titles

If you are selling a unit title property, the Unit Titles Act 2010 requires two statutory disclosure statements:

• Pre-contract disclosure statement — provided before a sale and purchase agreement is signed. Covers body corporate levies, long-term maintenance plan, planned or pending special levies, recent meetings, and known defects affecting the unit or the common property.
• Pre-settlement disclosure statement — provided after the agreement is signed, before settlement. Updates the pre-contract statement and includes additional information about the body corporate.

Failure to provide a statutory disclosure statement (or providing a materially inaccurate one) can give the purchaser rights including price adjustment, withdrawal, or damages. The statutory regime is serious business; if you are selling a unit title property, ensure these statements are prepared properly — usually by the body corporate and the vendor's solicitor.

For this reason, the agency should not be drafting statutory unit-title disclosure statements without the solicitor's involvement. If an agency is drafting one for you, stop and consult your solicitor first.

How the international picture differs

NZ's reliance on caveat emptor for standalone houses is unusual among developed-economy jurisdictions. Several comparable jurisdictions have mandatory vendor disclosure regimes:

• Victoria (Australia) — Sale of Land Act 1962, section 32. Vendor must provide a prescribed statement covering outgoings, services, planning controls, easements, notices, and building permits. Purchaser may rescind for material omission or misrepresentation.
• California — Civil Code §1102 Transfer Disclosure Statement. Prescribed form covering the condition of major systems and known defects. Strict liability for material misstatement.
• England & Wales — Seller's Property Information Form (SPIF) under Law Society protocol. Mandatory misrepresentation liability.

In each of these jurisdictions, the disclosure statement is a regulated instrument with defined content. In NZ, the disclosure statement for non-unit-title property is an agency-drafted instrument with variable content. Evangelou & Zumpano (2012) studied Hawaii's dual-agency disclosure law and found that mandatory disclosure compressed the price discount from 8% to 1.4% — disclosure regulation works when it is specific and enforced.

The long-term reform direction for NZ is almost certainly toward a statutory vendor disclosure regime along the Victoria or California model. For the moment, the agent-drafted document is what vendors engage with, and the vendor controls its content — subject to the licensee's overriding Rule 10.7 and Rule 9.2 duties.

What the vendor controls, and what the agency controls

The division of control in the agent-drafted disclosure is not always clear to vendors. In practice:

• Vendor controls: whether specific items are included, the wording of vendor-specific items, the final signed version of the document.
• Agency controls: the template structure, suggested items based on the agency's risk-management approach, the timeline for review and approval.

Where the licensee has suggested an item for inclusion and the vendor does not agree the item is a known defect or material risk, the vendor is entitled to refuse inclusion. The licensee's own view that the item is worth disclosing is not sufficient to require the vendor's signature to it.

However: if the item is a known defect, Rule 10.7 requires disclosure. The vendor cannot refuse inclusion of a known defect to avoid disclosing it. The distinction between a "known defect" and an "era-generic risk" is where most disclosure friction arises. A specific known issue (e.g., "the toilet leaks intermittently and requires periodic tightening of the inlet valve") is a known defect. A statement about 1910s homes generally potentially containing asbestos is an era-based risk, not a known defect about this specific property.

How to read a draft disclosure

When the agency sends a draft disclosure for your approval, read it against four tests:

1. Source test. For each item, can the agency point to a specific source — a building report page, a council record, a Healthy Homes report, a specific conversation with you? Items without a traceable source are often agency-originated risk-management additions.
2. Duplication test. If the underlying document (building report, LIM, Healthy Homes report) is being provided to purchasers, does the disclosure add a separate bullet for items already in those documents? Duplication amplifies risk without adding information.
3. Specificity test. Is each item specific to this property, or is it a general statement about the era, suburb, or construction type? Generic statements are not "disclosures" of property-specific defects.
4. Proportionality test. Does the language match the actual condition? "Replace" is different from "repair." "Significant" is different from "cosmetic." Language that inflates severity is not neutral disclosure.

See also Disclosure amplification: when the building report is provided, don't re-amplify.

Practical redlining

If the draft includes items you do not agree with, request specific changes in writing. Template language:

Hi [agent], thank you for the updated disclosure draft. Before I approve this version, I have the following requests:

1. For item [X], please confirm the specific source. If the source is the building report, let's reference the page directly in the disclosure and rely on the report itself. If there is no specific source, please remove the item.

2. For item [Y], the language "replace" overstates the required remediation. The building report describes this as cosmetic paint deterioration. Please amend to "repair/repaint recommended."

3. For item [Z], this appears to be a general era-based risk rather than a specific finding about this property. As the building report will be provided, please remove this duplicate entry.

Please send the revised draft for my review. I'll sign once we have aligned on the content.

The written trail has two purposes. First, it gives the agency a clear basis on which to amend. Second, if the matter later becomes a complaint, the correspondence demonstrates the vendor's active engagement with disclosure content — and the agency's response demonstrates whether its approach was in the vendor's best interests (Rule 6.2).

When to involve your solicitor

For most agent-drafted disclosures, solicitor review is not routine. For three situations, involving the solicitor before signing is prudent:

• The disclosure makes statements about compliance with the Building Code, Healthy Homes, or other regulatory regimes that you are not certain are accurate.
• The disclosure includes "vendor warranty and undertaking" language (a future commitment to remediate, not just a statement about current condition).
• The property has any unusual title feature (cross-lease complications, easements, encumbrances) that may be mischaracterised.

In all three cases, sending the draft to the solicitor before signing is a legitimate protective step. It is not something the agency should actively discourage; if it does, that itself is a signal.

Where this guide sits in the section

Next: Disclosure amplification: when the building report is provided, don't re-amplify.

Rules cited: Professional Conduct and Client Care Rules 2012 (Rules 6.2, 9.2, 10.7), Unit Titles Act 2010, Fair Trading Act 1986 (section 9), Consumer Guarantees Act 1993.