Disclosure letters in property transactions
Disclosure letters in property transactions

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Disclosure letters in property transactions
  • What is a disclosure letter?
  • What form does the disclosure letter take?
  • The disclosure bundle
  • How precise should a disclosure be?
  • Limitation by buyer's knowledge
  • When is the disclosure letter entered into?

What is a disclosure letter?

A disclosure letter is a letter from a seller to a buyer containing both general and specific disclosures as well as a disclosure bundle, against which warranties are given.

It is used by a seller to limit the buyer’s ability to bring a claim for a breach of warranty. Where a matter has been properly disclosed, the buyer is unable to sue. A well advised seller should disclose as much as possible.

For a buyer, the disclosure letter is used to elicit as much information as possible from the seller. If a buyer has advance warning of any issues before the acquisition, it can then consider asking for an indemnity or price reduction before exchange rather than having to bring a claim after completion.

What form does the disclosure letter take?

General disclosures

The general disclosures comprise a list of matters readily available from public records.

Common examples of general disclosures include all matters revealed by:

  1. a full company search of the target company

  2. the accounts of the target company

  3. an inspection of the property

  4. searches at HM Land Registry and Land Charges Registry

  5. searches at the local authority and all other public registers relevant to the property

A buyer should ensure that any accepted gene