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Sale
and purchase of residential property |
Conveyancing
is the legal process of buying, selling or mortgaging
property. Technology has enabled the practice of
conveyancing to become more streamlined. However
the essence of the task is still the same –
to achieve a successful completion of your purchase,
sale or remortgage and to provide this service cost
efficiently.
At
SeniorLaw Sydney we provide a written costs’
agreement at the beginning of the matter. We explain
each step of the transaction to you, draft or negotiate
terms leading up to the exchange of contracts, attend
to mortgagee or discharge of mortgagee requirements,
prepare any necessary legal documents and attend
to settlement. Your questions are always welcome
and answered promptly and in plain English. We recognise
the importance of this property transaction to you
and we aim to make the matter as straightforward
as possible.
Our
legal team has over 20 years property experience
covering every different type of home ownership
title. The different types of ownership in NSW briefly
are:
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Torrens
Title: This is the government system of recording
the transfer of ownership of land. Registration
of title documents provides the key to your
legal ownership. The majority of properties
in NSW would be owned under this title. |
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Strata
Title: This is the more common means of owning
a unit. The certificate of title gives you ownership
of part(s) of a building within the space of
your lot and you get a unit entitlement. The
Owners Corporation manages the administration
and common property of the building. As an individual
owner you will be required to contribute levies
to an Administrative and Sinking Fund. By-laws
should be checked for any changes. |
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Company
Title: This is the title of some unit buildings.
The price may reflect the fact that the unit
is not a strata title unit. Some lenders may
be hesitant to accept this security as you do
not acquire a title to the property but shares
in a company instead. The shares entitle the
shareholder to exclusive possession of a particular
unit. |
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Community
Title: This provides a purchaser with a Torrens
Title for a particular lot and membership of
an association similar to the strata scheme
Owners Corporation. |
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Common
Law Title: There is no certificate of title
created by registration as in the Torrens Title
system. Instead the title is made up of a collection
of Old System documents. Conversion to qualified
Torrens Title may happen after sale. Requires
intensive legal investigation and as a result
is more costly than a Torrens Title purchase. |
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FAQs
for Vendor and Purchaser |
Vendor
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When
does the Contract become binding?
After the vendor and the purchaser have each
signed a copy of the Contract an appointment
is made to formally exchange these copies. The
purchaser pays the deposit amount required by
Contract and the date of exchange is inserted
on the Contract. Both parties are then legally
bound by the Contract. |
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How
long is the cooling-off period?
A purchaser buying residential property is allowed
a cooling- off period of 5 business days after
exchange of Contract provided the purchaser’s
solicitor has not given a 66W Certificate at
the time of exchange. Parties can agree to lengthen
or shorten the
cooling -off period. |
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Can
I keep particular items even though the purchaser
saw them in place in the house at the inspection?
The vendor lists any fittings included in the
sale of the property. If the item is not specifically
included in the Contract it will not go with
the house. It is preferable to list the item
as an exclusion so there can be no doubt in
the purchaser’s mind. |
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Is
GST payable?
The purchase price of the property will normally
be inclusive of GST if it is payable. We can
discuss exemptions with you. |
Purchaser
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What
property investigations are usually made? Do
you do this or can you organise them for me?
Before you sign a Contract you would be wise
to have qualified inspectors report on the building,
pest activity, strata records if a unit, whether
roof water is connected to sewer, structural
engineering for pole houses, Council records
for zoning or existing use or flooding notation,
unauthorised additions or improvements, survey
etc. The type/ age of the property will determine
which reports and further investigations are
required. |
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Do
I have to pay stamp duty on exchange of Contract?
On exchange the purchaser pays a deposit which
is usually 10% of the price. You have 3 months
from the date of exchange to pay the NSW Government
stamp duty on the Contract. However as the duty
must be paid before completion of the purchase,
and in reality this can often take place 6 weeks
after exchange, you will have to be in a position
to pay this duty a lot earlier than 3 months.
To help you plan stamp duty amounts will be
advised at the outset. Off the plan purchases
attract different payment dates. |
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Who
determines the settlement date?
This date is agreed as a term of the Contract
by both parties. The agreed settlement or completion
date is often 6 weeks from the date of exchange.
Penalty interest may be payable on default. |
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Retirement
village contracts |
At
SeniorLaw Sydney we provide comprehensive advice
to clients considering a move to retirement village
living:
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The
first and golden rule is do not sign anything
without first obtaining legal advice. |
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Always
inspect a number of retirement villages, talk
to residents, consider location of shops, transport
and services |
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Are pets allowed |
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Physical access to buildings etc in later years
if frail |
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Levels
of care offered |
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Costs
– entry, exit extra service charges etc.
These must be assessed carefully to determine
the true cost when making a comparison between
different villages |
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Type
of contract? – the advantages and disadvantages
of licence, lease, strata or company title must
be examined – your rights as a resident
and costs associated with the unit will also
be affected by this |
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The
Department of Fair Trading administers the Retirement
Villages Act 1999 and regulations. This applies
to all retirement villages in NSW and proper
disclosure to prospective residents must be
provided by village operators. |
If
you have any queries in relation to retirement village
living we are happy to assist you. As this area
of law has become more regulated you will feel confident
making the move if you have experienced legal advisers
to support you. |
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Buying
Property - Auction or Private Sale |
Buying
at Auction
Laws
came into force in NSW 1 September 2003 to change
the manner of bidding at auctions to achieve greater
fairness.
Before
attending the auction you will arrange for any building/
strata / pest checks and have our legal team advise
you on the terms of the Contract.
If
you are interested in buying the property you now
have to comply with the new laws by registering
your details with the agent. These details will
be recorded in the Bidders Record and you will be
given a number which you will display if you make
a bid.
It
is illegal to make dummy bids at an auction.
If
you are the successful bidder, you then sign the
contract and pay the deposit (usually 10% of the
purchase price). It is important to note that there
is no cooling off period available to you if you
buy at auction.
Whether
you decide to buy at auction or direct from the
owner or through the owner’s real estate agent,
you will need to consider a number of issues:
Auction
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Private
Sale |
There
is no cooling off period when you buy at auction.
Contracts are binding on fall of the hammer.
|
Private
sale contracts may offer a cooling off period
of 5 business days (shorter or longer by agreement
of the parties). Can be expressly excluded by
use of a signed Section 66W Certificate in the
contract. |
The
full deposit (usually 10% of the purchase price)
is payable at the auction. Contract may allow
release to the vendor, direct money be held
in solicitor or agent’s trust account
or be placed on deposit.
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The
full deposit (usually 10% of the purchase price)
is payable on exchange of contracts. Negotiations
prior to exchange may exclude release of deposit
to vendor. |
| All
property inspections / reports have to be completed
before the auction at your cost. If you are
not the successful bidder you have to rationalise
these costs as part of good buying tactics –
the property is after all worth a large sum. |
If
you have a cooling off period you can use this
extra time to complete independent property
inspections /reports. You can then decide whether
to proceed based on this information or not
if a defect is found (after payment of penalty
fee from deposit). |
The
vendor will have given the auctioneer his reserve
price. You are unaware of this until it is declared
by the agent in the bidding.
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Contracts
will state the vendor’s asking price. |
Questionable
agent practices of underquoting to potential
bidders to get them to the auction or planting
dummy bidders. This is illegal. Recent legislation
aimed at stamping out these practices has not
resulted in many
prosecutions.
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Gazumping
may occur. The contract is not legally binding
until exchanged. Before this date you may experience
another buyer’s higher offer being accepted
by the vendor, particularly in a bullish market. |
Terms
of the contract are final on the fall of the
hammer. |
Parties
may negotiate contract terms up until contracts
are exchanged. |
| Bidding
at auction requires strong commitment to stay
within your price range and not get caught in
the ‘heart over head’ auction drama. |
Price
range more likely to be kept. Postcode price
guide / valuations considered without presence
of vendor’s agent. |
Once
reserve met and the property is officially on
the market this is the only time to consider
bidding. You now know the vendor’s lowest
price and this could work to your advantage,
especially if a mortgagee sale. May pave the
way for a ‘good buy’ if not sold
at auction.
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Vendor
may not negotiate on asking price. Alternatively,
if listed on the market for some time or a deceased
estate the vendor may be prepared to close on
offers. |
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Online
instruction form for sale or purchase |
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SeniorLaw
Sydney
ABN:
33 560 807 269
|
Level
5, Castlereagh Chambers
64 Castlereagh Street
Sydney NSW 2000
Australia |
| Tel. |
(02)
9235 3160 |
| Fax. |
(02)
9235 2733 |
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