| 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:
 |
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. |
|
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. |
|
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. |
|
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. |
|
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. |
FAQs
for Vendor and Purchaser Vendor
|
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. |
|
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. |
|
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. |
|
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
|
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. |
|
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. |
|
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. |
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. |
|
Always
inspect a number of retirement villages, talk to residents,
consider location of shops, transport and services |
|
Are pets allowed |
|
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 |
|
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.
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
|
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.
|
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.
|
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.
|
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.
|
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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