Property contracts are SLOWLY evolving into plain English (as opposed to legal-speak), but there is a limit as to how simple they can be made, while still properly informing and protecting the parties.
It’s our job as a Conveyancer to understand and interpret this information for you. Still, knowing a few of the basic terms, can only benefit you as negotiations commence.
Contract of sale
This is the legal document that outlines the details of property being sold and the agreement between the vendor (the seller) and the purchaser (you).
The contract of sale normally includes information like:
· Purchase price
· Special conditions (i.e. penalties for late completion, auction rules etc)
· Finance clauses (if agreed to by the vendor)
· Title searches, deposited or strata plans, Council planning certificate and water authority information (ie. sewer main diagram)
· Strata/Community plan information such as by-laws, changes to by-laws & management statements (if applicable)
· Existing tenancy agreements (if applicable)
Certificate of Title
This document will show the Lot number and Plan number for the property and will show the full name of the current owner of the property.
It also shows (where applicable):
· Easements
· Covenants
· By-laws
· Third party interests in the land (such as mortgages, caveats & writs).
At the change of ownership, the new owner details are registered on the Certificate of Title.
Cooling-off Period
Depending on the vendor’s instructions, contracts may be exchanged with a cooling-off period. The purchaser has the right to pull out of the contract during this phase.
The typical cooling off period is 5 business days.
For example, if you exchange contracts on a Friday, then your cooling-off period would expire at 5pm on the next Friday.
This is the period where you (the purchaser) can complete any specialist inspections (pest & building/strata records etc) and ensure your finance has been formally approved and to get advice from us with regard to the terms of the contract of sale.
Naturally, there are pros and cons.
The main benefit being you secured the property (the vendor does not get a cooling-off period). If you “cool-off” (pull out of the contract during the cooling-off period) then you will forfeit 0.25% of the price of the property to the vendor.
There are circumstances where you may not be entitled to a cooling off period. Typically, this is when the property is bought at auction, but sometimes high demand for a certain property may mean a cooling-off period is not accepted.
Easements
This is the right to use part of another property for a specific purpose. It also refers to the right to stop the property owner from using a part of their property in a particular manner.
Easements, such as a rights of way, drainage or utilities can restrict the manner in which the property is used.
Any easements affecting the property are discussed with your conveyancer, to ensure you fully understand how it may affect the property in question.
Completion Date (Settlement Date)
The date the property title is officially transferred to the purchaser. The balance of the purchase price and any financial adjustments and payments, like land taxes and council rates, will be made on this day.
You don’t need to be present at the settlement. The legal representatives take care of this (in person or online).
Once a settlement is confirmed to have successfully occurred, all parties are advised and the purchaser may arrange to collect the keys, normally from the real estate agent.
If you have any questions about your situation, contact me via leah@stevensconveyancing.com.au or call 0414 894 031 to discuss.
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Stevens Conveyancing does not take responsibility for any errors or omissions obtained from the use of this information.