When you buy or sell a property, the Title Deed needs to be transferred from the seller (vendor) to the buyer (purchaser) and this process is referred to as Conveyancing.
Transferring property ownership can be fun, but for many, it can be a trying experience. Moving home is consistently ranked as one of the most stressful life events.
I&J LAW can help remove much of the anxiety associated with legalities of buying and selling residential property, enabling you to focus on the more exciting aspects of the process.
Pertinent points to consider before you sign a Contract of Sale
When purchasing a property …
- Has your finance been formerly approved before you sign the Contract of Sale?
Once you sign the Contract of Sale and after the cooling off period has expired (unless you go to auction when there is no cooling off period), you are bound by the Contract of Sale even if your finance arrangements fall through. There are significant penalties for breach of Contract of Sale.
- Have you considered stamp duty costs in your calculations?
Generally your newly acquired property cannot be registered in your name without payment of stamp duty which can be quite a significant amount. You must add to the sale price the stamp duty costs to arrive at the final amount you will have to pay.
- Have you conducted a pest inspection of the premises?
If you don’t get a pest inspection and for example, after settling, you find termites on the property, you are unlikely to have any recourse against the seller.
- Have you engaged a building inspector?
In Sydney for example, many properties have a problem with rising damp. A building inspector can advise on any work required on the property before you purchase and in some circumstances enables you to re-negotiate the purchase price.
- Are the strata records sound?
If there are anticipated special levies or other issues with the unit, you need to know about this before you proceed so you can understand the real cost of purchase.
- Most importantly, has your Contract of Sale been legally reviewed before you sign it?
Once the Contract of Sale has been signed, you are bound by the terms of the contract and you generally cannot negotiate or change terms thereafter. If there are terms in the Contract of Sale that need to be deleted or amended, this needs to be done before you sign.
- Have you established whether you need a license to move in before settlement?
This can be negotiated as part of the Contract of Sale and if agreed, means that you can stay in the property before you officially take ownership.
If you are selling your property …
- Are there special conditions that need to be included in your Contract of Sale?
For example if you have a swimming pool, have you set out your compliance with the recent changes to swimming pool legislation.
- Have you assessed your circumstances to determine whether you need an extended settlement?
In the event you need to find a place to stay before you move out of your home, you may need to ensure that an extended settlement period is clearly specified in the Contract of Sale.
- Have you conducted searches to be included in the contract?
One search that is usually included in the Contract of Sale proves to all potential purchasers that you are the registered owner. Others might be to illustrate for example, what the drainage is like (in case they are thinking of renovating), or any restrictions that might exist on the use of the property. If you don’t include all relevant searches, the buyer may have recourse against you for failing to notify them prior to settlement.
- Have you liaised with your financial lending institutions so that they understand when the funds are likely to be repaid?
This allows them to calculate the final settlement amount and ensures that they discharge the mortgage on the date of settlement. This needs to happen so that settlement can proceed smoothly. If you do not have the correct amounts, settlement may not be able to occur on the scheduled date.