If you are selling a Wagga Wagga home and you know it has foundation problems, the question of whether you need to disclose them is not just an ethical one. Whether you legally have to disclose foundation issues when selling in NSW has a specific answer, and getting it wrong carries real consequences. This is general information only: your conveyancer or solicitor is the right person to advise on your specific situation.
What NSW law actually requires vendors to disclose
NSW property law uses a “buyer beware” framework for most physical defects. Unlike some other jurisdictions, NSW does not require vendors to proactively list every defect they know about in a standard residential sale contract. The mandatory disclosure obligations in an NSW vendor disclosure statement are primarily procedural: title searches, planning certificates, strata records and the like.
That said, the law does not allow active concealment or misrepresentation. The relevant frameworks include:
- Contract-attached disclosures: The vendor’s solicitor attaches a Section 10.7 planning certificate (formerly Section 149 under the EP&A Act) to the contract. This records zoning, flood-prone land classifications and some heritage overlays, but does not disclose physical building defects.
- Australian Consumer Law (ACL): A vendor who makes a positive representation about a property, saying it is structurally sound, for instance, that they know is false, or omits a fact that makes another statement misleading, may be in breach of ACL.
- Common law misrepresentation: A vendor who actively conceals a defect, or takes steps to disguise it (fresh plaster over cracks, for example), risks a claim of fraudulent or negligent misrepresentation.
The practical upshot: the law does not require you to volunteer that you have foundation issues, but you cannot lie about it or actively hide it.
Standard contract disclosures vs volunteered information
What appears in a standard NSW contract:
- Title and encumbrances information
- Planning certificate (zoning, flood overlays, heritage listings)
- Strata plan information (if applicable)
- Sewerage connection details
What does not automatically appear in a standard contract:
- Known structural defects or foundation movement
- Previous underpinning, restumping or crack repair works
- Previous insurance claims related to the property
- Engineer’s reports or building inspection reports already obtained by the vendor
Vendors are not legally required to attach these documents under the standard NSW contract conditions, but a buyer’s solicitor will commonly ask for them during the cooling-off period. Withholding a report you have already commissioned, particularly if the buyer’s solicitor asks a direct question about the foundation condition, moves you closer to active misrepresentation.
See our selling a house with foundation issues guide for a broader overview of the practical options.
Why ‘don’t ask, don’t tell’ is a bad strategy
Some vendors assume that if they do not mention the foundation problem, and the buyer’s inspector does not find it, the problem goes away at settlement. There are several reasons this is risky:
Physical defects do not disappear at settlement. A crack that has been patched but not underpinned will reopen. The buyer may discover it within months of settlement and investigate when and why it was patched.
Building inspection reports are increasingly thorough. Buyers who engage a pre-purchase foundation checklist approach will specifically request a building inspection that looks at foundation indicators. Professional inspectors checking for sticking doors, cracked lintels, uneven floors and external stepped cracking are likely to find what a fresh coat of paint is trying to hide.
Post-settlement claims. If a buyer can demonstrate you knew about a material defect and did not disclose it when asked directly, or actively concealed it, they have grounds for rescission or damages. These claims are expensive and disruptive even when the vendor ultimately prevails.
Insurance complexity. If you have made an insurance claim for foundation damage on the property, that claim history attaches to the property address. Buyers doing due diligence may discover it through insurers or title searches even if you say nothing.
The role of your conveyancer or solicitor
Your conveyancer or solicitor prepares and manages the vendor disclosure documents. Their role in this context is to:
- Advise you on what must be disclosed under the specific contract conditions being used
- Draft appropriate special conditions if repairs have been made and you want to document them
- Advise on the risk if a buyer’s solicitor asks a direct question about foundation condition
- Review any representations made in marketing material to ensure they do not create a misleading impression
Ask your solicitor directly: “I know this property has had foundation movement. What do I need to disclose and how should I word it?” A straightforward question gets a much cleaner answer than trying to navigate it yourself.
How a written engineer’s report changes the disclosure conversation
A structural engineer’s report, see our structural engineer report cost guide for what this typically costs, can actually improve your position as a vendor in a foundation-issue sale:
- It demonstrates you investigated the problem properly
- If the report recommends repair and you then carry out that repair, it documents what was done
- If you choose to sell without repairing and attach the report to the contract, buyers receive full information and cannot later claim they were misled
- For a completed repair, an engineer’s sign-off provides the buyer with documented confirmation the work was done to specification
Attaching an engineer’s report and a completion certificate from the underpinning or restumping contractor to the vendor disclosure package is becoming more common in NSW for properties where foundation work has been done. Our warranties and guarantees guide explains what documentation good contractors provide at completion.
Repair-then-sell vs price-in-the-issue
Two practical paths for vendors with known foundation problems:
Repair then sell: Commission a foundation inspection, obtain quotes, carry out the structural repair via our underpinning service or appropriate method, obtain the engineer’s completion certificate, and go to market with a documented clean bill of structural health. The repair cost may be recovered (partially or fully) in a higher sale price or faster settlement.
Price it in: Obtain a foundation inspection and an engineer’s assessment of the scope and cost of repair. Disclose the report to buyers. Price the property accordingly, reflecting the known repair cost. This path requires honest disclosure but avoids the delay and cost of repair before sale.
| Path | Pros | Cons |
|---|---|---|
| Repair then sell | Cleaner sale, broader buyer pool, may recover cost in price | Upfront capital required, time delay |
| Price it in and disclose | Faster to market, no repair cost | Narrower buyer pool, price discount typically exceeds actual repair cost |
Which path makes more sense depends on the extent of the problem, local market conditions and your timeline. The foundation repair buyers checklist gives buyers a framework that will guide the questions your potential purchasers will ask.
FAQs
Am I legally required to tell a buyer about foundation problems in NSW?
You are not automatically required to volunteer a list of physical defects in a standard NSW residential sale contract. However, you cannot actively misrepresent the property’s condition, and you cannot conceal known defects in a way that misleads the buyer. If a buyer’s solicitor asks a direct question about foundation condition during the sale process, answer honestly. Consult your conveyancer for advice specific to your situation.
What if I had crack repairs done but never got an engineer’s report?
Disclose the repairs you made to your conveyancer and ask for advice on how to represent the work. Repairs done without engineering documentation can be harder to characterise in a disclosure. It is not automatically a problem, but your solicitor needs to know so they can advise on how to handle buyer enquiries.
Can a buyer rescind a contract after settlement because of foundation issues?
In general, it is very difficult to rescind after settlement for physical defects under standard NSW contract conditions. However, if a buyer can demonstrate fraudulent or negligent misrepresentation, that you knew about a material defect and actively hid it, a claim remains possible. The best protection is honest disclosure and proper documentation.
Does a planning certificate (Section 10.7) mention foundation problems?
No. A Section 10.7 planning certificate records planning and zoning information from council. It notes flood-prone land classifications and heritage listings, but it does not disclose physical building defects or structural issues. It is a planning document, not a structural health certificate.
Does disclosing foundation issues always kill a sale?
Not necessarily. Buyers who find foundation problems during their own inspection are often more alarmed than those who receive an upfront, professionally documented disclosure package. A vendor who says “here is the engineer’s report, here is the repair quote, and here is what was done” is in a much stronger position than one whose buyer discovers the problem independently. Transparency, supported by documentation, often results in a cleaner negotiation.
Related reading
- Selling a house with foundation issues
- Structural engineer report costs in NSW
- Foundation inspections service
- Foundation repair buyers checklist
- Making a foundation insurance claim in Wagga
- Underpinning service
- Foundation repair warranties and guarantees
- Pre-purchase foundation checklist for Wagga buyers