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The Four Stages of a Conveyancing Transaction – Buyers Part 4 Settlement/ Post Settlement

The Four Stages of a Conveyancing Transaction – Buyers Part 4 Settlement/ Post Settlement

Introduction

There are essentially four stages that cover the breadth of the conveyancing process:

  1. Pre-Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement .

Each of these stages offers its own risks.

Settlement/Post Settlement

The importance of this stage, which covers the settlement process and the following period, is often overlooked and matters can “slip through the cracks” as a result.

Settlement

Your solicitor will generally attend settlement on your behalf and will manage all aspects including the exchange of:

  • settlement cheques;
  • releases of security interests (Mortgages and Personal Property Security Register entries); and
  • transfer documentation.

However, you should ensure that you can be contacted at the time that settlement is planned so that your solicitor can advise you of any “last minute” issues that can arise and obtain your instructions.

Following the settlement, your solicitor will confirm to you and the real estate agent that settlement has occurred so that the keys can be released to you.

Post Settlement
Transfer Documentation

Where you have borrowed funds to assist you in making your purchase, your financier will take transfer documentation at settlement and lodge all documents with the Land Titles Office. However, if you have funded the purchase from your own funds then your solicitor will lodge the documents on your behalf.

Recognition of Change of Ownership

Whilst settlement has occurred the land that you have purchased will not be transferred into your name until the transfer documents are lodged with, and accepted by, the Land Titles Office and there can sometimes be a delay.

Your solicitor will generally perform a check search at the Land Titles Office approximately one month after settlement and will liaise with you to advise when you are shown as the new owner of the land. However, if you have not heard from them within a month you should call them to discuss progress.

Utilities

Once you are shown as the new owner of the land the responsibility for payment of utilities will also pass to you. There can sometimes be a delay and utility providers will often reissue notices to you as the new owner.

However, if notices are not reissued then late fees on existing notices can be charged and you should liaise directly with the utility providers if this occurs to discuss a waiver of these fees. Your solicitor will be able to assist you here.

Body Corporate Fees

If you purchase a unit then your solicitor will lodge the necessary form with the Body Corporate Manager with a request that you be reflected as the new owner in Body Corporate records.

As with utilities if late fees are incurred then you should liaise directly with the Body Corporate Manager if this occurs to discuss a waiver of these fees. Again your solicitor will be able to assist you here.

Conclusion

Buying a House will for most people be the most important financial decision and one that can be highly stressful and we hope that our series of documents covering the four stages of the conveyancing process has helped you through that process.

Naturally, we are happy to advise you on all stages of the conveyancing process.

Miss the series on selling a property? Click the below:
pre-contractual selling - the four stages of conveyancing
The Four Stages Of Conveyancing Selling part 2
The Four Stages Of Conveyancing Selling part 3
The Four Stages Of Conveyancing Selling part 4 conveyancing
Contact

The Four Stages of A Conveyancing Transaction – Buyers Part 3 Unconditional

UNCONDITIONAL STAGE – BUYER

INTRODUCTION

There are essentially four stages that cover the breadth of the conveyancing process:
  1. Pre-Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement.

Each of these stages offers its own risks.

UNCONDITIONAL STAGE

The importance of this stage, which occurs after all contractual conditions have been met but prior to settlement, cannot be understated as there is now a binding unconditional contract in place and failure to settle as provided in the contract will expose you to liability.

There are a number of important activities that you need to consider in this stage:

1. Transfer Documents

Your solicitor will prepare Land Titles Office transfer documents that will the basis for the transfer of the land into your name so it is important that you liaise with any questions raised by them, including those relating to:

  • Personal details (including date of birth);
  • Contact details after settlement; and
  • How you will be holding the land (where there are two or more buyers you will need to advise your solicitor whether you will be holding the land as tenants in common or joint tenants).
2. Stamp Duty Concessions

Your purchase represents a major financial investment by you, whether you are buying for residential or investment purposes, so it is important that you ensure that you are taking advantage of any available concessions that will reduce the amount of stamp duty that you are required to pay.

You should liaise with your solicitor to ensure that they have advised you of available concessions and have supplied the relevant Office of State Revenue forms that you should complete and return to them as soon as possible.

3. Additional Documents/Information

You need to ensure that you have supplied your solicitor with any documents or information that they have requested, these will include:

  • Power of Attorneys;
  • Trust Deeds; and
  • Certified copies of Identification Documents.

If in doubt you should call your solicitor to check that they are not waiting on any documents or information.

4. Sufficient Funds to Settle

You need to ensure that there will be sufficient funds to meet all amounts payable at settlement. Your solicitor will liaise with you on this matter but will need to be able to contact you during this important period.

Your solicitor will usually send you a draft Settlement Statement at least seven days prior to settlement that will set out the total amount payable at a settlement which will include:

  • Amount payable to the seller under the contract;
  • Adjustments for utilities to ensure that the cost for the current period are correctly allocated between you and the seller;
  • Stamp (or Transfer) Duty;
  • Search fees (to the extent not already paid into your solicitor’s trust account); and
  • Professional Fees (to the extent not already paid into your solicitor’s trust account).

You should review the draft Settlement Statement and advise your solicitor of any changes that you require as soon as possible.

FUNDS PAYMENT

The amount payable will generally be covered by loan funds and funds that you are contributing.

  1. Borrowed Funds

You need to ensure that your financier is aware of the settlement date and that any problems with settling on this date are promptly communicated to your solicitor so that they can discuss the possibility of an extension if this is required.

You should also ensure that you have met any requirements that your financier has advised as a condition of approval.

Your financier may deal directly with your solicitor but most banks and credit unions will require that you have supplied your solicitors contact details to them and authorised them to speak with your solicitor.

It is important that you are aware of the amount of loan funds that will be available at settlement as the loan amount is likely to be reduced by fees for loan application and processing, transfer registration lodgement and settlement.

  1. Funds That You Are Contributing

You need to ensure that you have made arrangements to have these funds available at settlement, either through bank cheques from your account or through transfer to your solicitor’s trust account well prior to settlement.

Miss the series on selling a property? Click the below:
pre-contractual selling - the four stages of conveyancing
The Four Stages Of Conveyancing Selling part 2
The Four Stages Of Conveyancing Selling part 3
The Four Stages Of Conveyancing Selling part 4 conveyancing

Contact

The Four Stages of a Conveyancing Transaction – Buyers Part 2 Conditional

CONDITIONAL STAGE – BUYER

INTRODUCTION

There are essentially four stages that cover the breadth of the conveyancing process:

  1. Pre Contractual Stage;
  2. Conditional Stage;
  3. Unconditional Stage; and
  4. Settlement/Post Settlement Stage.

CONDITIONAL STAGE

The importance of this stage, which occurs after the signing of the contract but before the contract becomes unconditional, cannot be overlooked as it is during this stage that the buyer under a contract can elect not to proceed with a purchase, usually without penalty, so long as they can come demonstrate that a condition of the contract has not been met.

As a matter of law, this is an example of a “condition precedent” as the condition must be met, unless its failure to be met is excused, before performance under a contract becomes due and before any contractual duty exists.

Types of Conditions

The most common examples of such conditions are set out below.

Cooling Off

Under the Property Occupations Act, a buyer may, within a five business day period commencing on the day that they receive a copy of the contract signed by the seller, terminate the contract but will be subject to a 0.25% termination penalty.

Finance

The Finance Condition sets out whether the contract is subject to finance, whether the buyer is free to seek finance from any financial institution, what finance amount is required to meet the condition and when the Finance Date is due. Where the contract has a Finance condition the contract is conditional on the buyer obtaining the financial assistance required to settle and the buyer may elect not to proceed if they cannot do so.

However, buyers should note that the standard REIQ contract specifies that unless Finance Amount, Financier and Finance Date are all completed then the contract is NOT “subject to finance” and failure to be able to pay for the purchase is not a ground for termination.

There is no termination penalty payable here.

Building and Pest

The Building and Pest Condition provides that the contract is conditional on the buyer receiving a satisfactory report from a Building and Pest inspector on the state of the property being purchased but again it is important to note that if the Inspection Date is NOT “subject to Building and Pest” and issues that would not be covered by such an inspection are not grounds for termination.

There is no termination penalty payable here.

However, these conditions are not a “general” power to get out of a contract because you have changed your mind.

Other conditions can be included in a contract and it is for this reason that it is important that you consider the need for such conditions before signing the contract.

One such condition, whose power is frequently overlooked, is a Due Diligence condition that allows a buyer to terminate the contract if their investigations reveal a matter that causes them sufficient concerns to want to do so.

APPLICATION TO BUY

The buyer must, by 5 pm on the due date determined pursuant to the contract, advise the seller that:

  1. they have received a satisfactory finance offer/inspection report or waive the condition and that they wish to proceed with the contract; or
  2. they have not been able to obtain a satisfactory offer of finance/inspection report and are electing to terminate the contract; or
  3. they are requesting an extension of the due date for the relevant condition, although the seller is under no obligation to grant such requests.

Failure to do so does not mean that the buyer loses their right to terminate but it does give the seller the right, until the buyer provides one of the above advices, to terminate the contract.

However, the buyer’s deposit would be refundable.

Important Lessons for Buyers

Buyers should ensure that they adequately protect themselves by undertaking the following important three activities:

  1. include, as far as the seller will accept, that they include in the contract appropriate conditions to allow them to address all matters of concern and terminate the contract if their investigations reveal adverse matters;
  2. ensure that the periods set out for conditions in the contract are sufficient to allow them to conduct all necessary investigations, including making their finance application and organising a building inspection; and
  3. ensure that they act quickly within the specified period to apply for finance/organise an inspection so that they are in a position to determine whether they want to proceed with the contract at expiry of this period.

On many occasions we are approached by client buyers who have not allowed sufficient time/acted quickly enough and are now unsure as to what they are able to do and as a result are exposed to the risk that the seller may terminate the contract.

CONCLUSION

Buying a House will for most people be the most important financial decision that they make – we cannot recommend highly enough the importance of understanding all contract conditions and ensuring that you meet all due dates and promptly advise your solicitor if you consider that you may encounter difficulties in doing so.

Miss the series on selling property? Click the below:
pre-contractual selling - the four stages of conveyancing
The Four Stages Of Conveyancing Selling part 2
The Four Stages Of Conveyancing Selling part 3
The Four Stages Of Conveyancing Selling part 4 conveyancing
Contact

The Four Stages of A Conveyancing Transaction – Buyers Part 1 Pre-Contractual

PRE-CONTRACTUAL STAGE – BUYER

INTRODUCTION

There are essentially four stages that cover the breadth of the conveyancing process:

  1. Pre Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement .

Each of these stages offers its own risks.

PRE CONTRACTUAL STAGE

The importance of this stage, which occurs before the signing of contract, is often overlooked with inexperienced property buyers signing the “standard” Real Estate Institute of Queensland (REIQ) contract without reading the document fully.

A standard REIQ contract can be divided into the following sections:

1. Reference Schedule

This part covers important details such as :

  • Real Estate Agent;
  • Buyer (and their Solicitor);
  • Seller (and their Solicitor);
  • Property Address; and
  • Price (including deposit amounts and when these are payable).

Yet you would be surprised how many errors we find when we receive contracts signed by clients – this is an important legal document but common errors include:

  • Spelling errors;
  • Wrong property;
  • Incorrect contact numbers; and
  • Confusion as to what fixtures are excluded and what chattels are included.

Next are three key matters – the Finance and the Building and Pest Inspection dates and terms and the Matters Affecting the Property.

The Finance Condition sets out whether the contract is subject to finance, whether the buyer is free to seek finance from any financial institution, what finance amount is required to meet the condition and when the Finance Date is due.

Please note that the standard REIQ contract specifies that unless Finance Amount, Financier and Finance Date are all completed then the contract is NOT “subject to finance” and failure to be able to pay for the purchase is not a ground for termination.

The Building and Pest Condition sets out when the inspection is to be performed and again it is important to note that if the Inspection Date is NOT “subject to Building and Pest” and issues that would be covered by such an inspection are not grounds for termination.

The Matters Affecting Property provides the place where the seller of the property is able to disclose:

  1. encumbrances on the property that will remain after settlement; and
  2. details of tenancies on the property – please note that leases less than 3 years will not show up on a title search on the property.

The Reference Schedule then shows details of compliance with Pool Safety, Electrical Safety Switch and Smoke Alarm requirements.

Finally the Reference Schedule shows any Special Conditions that apply to the contract.

2. Terms of Contract

That is the ‘fine print’ of the contract and in an article of this size we cannot provide a detailed commentary on each term. However here are some key terms of which you should be aware:

Term 1 – Definitions – “business days” – this is a key term given that many conditions are expressed as due within x business days.

Term 2 – Purchase Price – whether price includes GST and what adjustments can be made to the Purchase Price.

Terms 3 and 4 – Finance and Building and pest Inspection Reports and Pool Safety – notice requirements and termination rights.

Term 5 – Settlement – times within which settlement must occur and arrangements for handover of keys at settlement.

Term 6 – Time – this reinforces that where something is to be done by a certain time it is vital that this timeframe is strictly followed.

Term 7 – Matters Affecting the Property – seller warranties and how issues with encroachment and survey matters do not necessarily give a right to termination.

Term 8 – Right and Obligations Until Settlement – that the property is at the risk of the buyer from 5 pm on the first business day following the signing of the contract and how any requests for early (before settlement) possession will be handled.

Term 9 – Parties Default – this covers each party’s rights if the other part is in default of the contract.

Term 11 – Electronic Settlement – this is a relatively new initiative that will be covered in a later article.

CONCLUSION

Buying a House will for most people be the most important financial decision that they make so we cannot recommend highly enough the importance of reading the contract fully and ensuring that you satisfy yourself on all matters before you sign the contract.

Missed our earlier articles? Click below to get all the information.

 

pre-contractual selling - the four stages of conveyancing

 

The Four Stages Of Conveyancing Selling part 2

 

The Four Stages Of Conveyancing Selling part 3

 

The Four Stages Of Conveyancing Selling part 4 conveyancing

 

Contact

The Four Stages of a Conveyancing Transaction – Sellers Part 4 Settlement & Post Settlement

SETTLEMENT / POST SETTLEMENT – SELLER

INTRODUCTION

There are essentially four stages that cover the breadth of the conveyancing process:

  1. Pre-Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement.

Each of these stages offers its own risks.

SETTLEMENT/POST SETTLEMENT

The importance of this stage, which covers the settlement process and the following period, is often overlooked and matters can “slip through the cracks” as a result.

Settlement

Your solicitor will generally attend settlement on your behalf and will manage all aspects including the exchange of:

  • settlement cheques;
  • releases of security interests (Mortgages and Personal Property Security Register entries); and
  • transfer documentation.

However, you should ensure that you can be contacted at the time that settlement is planned so that your solicitor can advise you of any “last minute” issues that can arise and obtain your instructions.

Following settlement, your solicitor will confirm to you and the real estate agent that settlement has occurred so that the keys can be released to the buyer.

Post Settlement
  • Transfer Documentation

Transfer documents will generally be lodged by either the buyer’s financier or solicitor or by the buyer themselves.

  • Recognition of Change of Ownership

Whilst settlement has occurred the land that you have sold will not be transferred into the buyer’s name until the transfer documents are lodged with, and accepted by, the Land Titles Office and there can sometimes be a delay.

Your solicitor will generally perform a check search at the Land Titles Office approximately one month after settlement and will liaise with you to advise when the buyer is shown as the new owner of the land. However, if you have not heard from them within a month you should call them to discuss progress.

  • Utilities

Once the buyer is shown as the new owner of the land the responsibility for payment of utilities will also pass to them. However, there can sometimes be a delay and utility providers will often reissue notices to the new owner.

However if notices are not reissued then late fees on existing notices can be charged and you should, therefore, forward any notices that you receive after settlement to your solicitor so that they can provide them to the buyer.

  • Body Corporate Fee

If you have sold a unit then the buyer’s solicitor will lodge the necessary form with the Body Corporate Manager with a request that the buyer be reflected as the new owner on Body Corporate records.

As with utilities if late fees are incurred then you should liaise direct with the Body Corporate Manager if this occurs to discuss a waiver of these fees. Again you should forward any notices that you receive after settlement to your solicitor so that they can provide them to the buyer.

CONCLUSION

Selling a House will for most people be the most important financial decision and one that can be highly stressful and we hope that our series of documents covering the four stages of the conveyancing process have helped you through that process.

Naturally, we are happy to advise you on all stages of the conveyancing process.

Missed our earlier articles? Click below to get all the information.

 

pre-contractual selling - the four stages of conveyancing

 

The Four Stages Of Conveyancing Selling part 2

 

The Four Stages Of Conveyancing Selling part 3

 

 

 

Contact

The Four Stages of a Conveyancing Transaction – Part 3 Sellers

UNCONDITIONAL STAGE – SELLER

INTRODUCTION

There are essentially four stages that cover the conveyancing process:

  1. Pre-Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement.

Each of these stages offers its own risks.

UNCONDITIONAL STAGE

The importance of this stage, which occurs after all contractual conditions have been met but prior to settlement, cannot be understated as there is now a binding unconditional contract in place and failure to settle as provided in the contract will expose you to liability.

There are a number of important activities that you need to consider in this stage:

  1. Transfer Documents

The buyer’s solicitor will have prepared Land Titles Office transfer documents that will the basis for the transfer of the land into their name so it is important that you liaise with any questions raised by them, including those relating to:

  • Execution requirements; and
  • Contact details after settlement.
  1. Additional Documents/Information

You need to ensure that you have supplied your solicitor with any documents or information that they have requested, these will include:

  • Power of Attorneys;
  • Trust Deeds; and
  • Certified copies of Identification Documents.

If in doubt you should call your solicitor to check that they are not waiting on any documents or information.

  1. Sufficient Funds to Settle

You need to ensure that you will receive sufficient funds to meet all amounts payable at settlement. Your solicitor will liaise with you on this matter but will need to be able to contact you during this important period.

Your solicitor will usually send you a draft Settlement Statement at least seven days prior to settlement that will set out the total amount payable at settlement which will include:

  • Amount payable to you under the contract;
  • Adjustments for utilities to ensure that the cost for the current period are correctly allocated between you and the seller;
  • Search fees (to the extent not already paid into your solicitor’s trust account); and
  • Professional Fees (to the extent not already paid into your solicitor’s trust account).

You should review the draft Settlement Statement and advise your solicitor of any changes that you require as soon as possible.

Things to consider

The amount payable will need to cover the following:

  • Money Owed to Your Financier

You need to ensure that your financier is aware of the settlement date and that any problems with settling on this date are promptly communicated to your solicitor so that they can discuss the possibility of an extension if this is required.

You should also ensure that you have met any requirements that your financier has advised as a condition of discharge of their mortgage.

Your financier may deal directly with your solicitor but most banks and credit unions will require that you have supplied your solicitors contact details to them and authorised them to speak with your solicitor.

It is important that you are aware of the amount of funds required at settlement as the amount that you owe is likely to be increased by fees for loan and mortgage discharge processing and settlement.

  • Money Owed to Other Parties

You need to ensure that you have provided instructions to your solicitor in respect of any funds payable to other parties. Your solicitor will generally arrange for cheques to be raised to clear outstanding amounts to utilities but you should ensure that your solicitor is aware of any other cheques required.

  • Surplus Funds

You should ensure that you have advised your solicitor of where any surplus funds are to be paid.

Read our previous article on the Pre-Contractual stage of the conveyancing process for sellers.

pre-contractual selling - the four stages of conveyancing

 

The Four Stages Of Conveyancing Selling part 2

Contact

The Four Stages of a Conveyancing Transaction – Part 2 Sellers

CONDITIONAL STAGE – SELLER

INTRODUCTION

There are four stages that cover the breadth of the conveyancing process:

  1. Pre-Contractual Stage;
  2. Conditional Stage;
  3. Unconditional Stage; and
  4. Settlement/Post Settlement Stage.
CONDITIONAL STAGE

The importance of the conditional stage (which occurs after the signing of the contract but before the contract becomes unconditional) cannot be overlooked as it is during this stage that the buyer under a contract can elect not to proceed with a purchase, usually without penalty, so long as they can demonstrate that a condition of the contract has not been met.

As a matter of law, this is an example of a “condition precedent” as the condition must be met, unless its failure to be met is excused, before performance under a contract becomes due and before any contractual duty exists.

Types of Conditions

The most common examples of such conditions are set out below.

Cooling Off

Under the Property Occupations Act, a buyer may, within a five business day period commencing on the day that they receive a copy of the contract signed by the seller, terminate the contract but will be subject to a 0.25% termination penalty.

Finance

The Finance Condition sets out whether the contract is subject to finance, whether the buyer is free to seek finance from any financial institution, what finance amount is required to meet the condition and when the Finance Date is due. Where the contract has a Finance condition the contract is conditional on the buyer obtaining the financial assistance required to settle and the buyer may elect not to proceed if they cannot do so.

However, you should note that the standard REIQ contract specifies that unless Finance Amount, Financier and Finance Date are all completed then the contract is NOT “subject to finance” and failure to be able to pay for the purchase is not a ground for termination.

There is no termination penalty payable here.

Building and Pest

The Building and Pest Condition provides that the contract is conditional on the buyer receiving a satisfactory report from a Building and Pest inspector on the state of the property being purchased but again it is important to note that if the Inspection Date is NOT “subject to Building and Pest” and issues that would not be covered by such an inspection are not grounds for termination.

There is no termination penalty payable here.

However, these conditions are not a “general” power to get out of a contract because the buyer has changed their mind.

Other conditions can be included in a contract and it is for this reason that it is important that you consider the need for such conditions before signing the contract.

One such condition, whose power is frequently overlooked, is a Due Diligence condition that a buyer may seek and is the right to terminate the contract if their investigations reveal a matter that causes them sufficient concerns to want to do so.

Application

The buyer must, by 5:00 pm on the due date determined pursuant to the contract, advise you or your solicitor that:

  1. they have received a satisfactory finance offer/inspection report or waive the condition and that they wish to proceed with the contract; or
  2. they have not been able to obtain a satisfactory offer of finance/inspection report and are electing to terminate the contract; or
  3. they are requesting an extension of the due date for the relevant condition, although the seller is under no obligation to grant such requests.

Failure to do so does not mean that the buyer loses their right to terminate but it does give you the right, until the buyer provides one of the above advices, to terminate the contract.

However, the buyer’s deposit would be refundable.

Important Lessons for Sellers

You should ensure that you adequately protect yourself by undertaking the following important activities:

  1. ensure that the periods set out for conditions in the contract, whilst sufficient to allow buyers to conduct all necessary investigations, including making their finance application and organising a building inspection, are not so long as to expose you to undue delays that prevent you from moving on confident that the sale will eventuate; and
  2. ensure that you act quickly upon the specified period if the buyer has not advised their decision on a condition, including whether to want to proceed or terminate the contract.

On many occasions, we are approached by sellers who are now unsure as to what they are able to do and as a result are exposed to the risk that the buyer may delay advising their decision in respect of a contract condition.

Conclusion

Selling a House will for most people be the most important financial decision that they make – we cannot recommend highly enough the importance of understanding all contract conditions and ensuring that you liaise with your solicitor around all due dates and promptly advise them if the buyer fails to provide the required advices by the expiry date.

Read our previous article on the Pre-Contractual stage of the conveyancing process for sellers.

pre-contractual selling - the four stages of conveyancing

 

Contact

 

The Four Stages of a Conveyancing Transaction – Part 1 Sellers

PRE-CONTRACTUAL  STAGE – SELLER

INTRODUCTION

The Four Stages of a Conveyancing Transaction – Part 1 Sellers:

  1. Pre-Contractual;
  2. Conditional;
  3. Unconditional; and
  4. Settlement/Post Settlement.

Each of these stages offers its own risks.

PRE-CONTRACTUAL STAGE

The importance of this stage, which occurs before the signing of a contract, is often overlooked with clients signing the “standard” Real Estate Institute of Queensland (REIQ) contract without really reading the document fully. Brisbane Property Conveyancing requires expert care to get right.

A standard REIQ contract can be divided into the following parts –

1. Reference Schedule

This part covers important details such as:

  • Real Estate Agent;
  • Buyer (and their Solicitor);
  • Seller (and their Solicitor);
  • Property Address; and
  • Price (including deposit amounts and when these are payable).

Yet you would be surprised how many errors we find when we receive contracts signed by clients – this is an important legal document but common errors include:

  • Spelling errors;
  • Wrong property;
  • Incorrect contact numbers; and
  • Confusion as to what fixtures are excluded and what chattels are included.

Next are three key matters – the Finance and the Building and Pest Inspection dates and terms and the Matters Affecting the Property.

The Finance Condition sets out whether the contract is subject to finance, whether the buyer is free to seek finance from any financial institution, what finance amount is required to meet the condition and when the Finance Date is due.

Please note that the standard REIQ contract specifies that unless Finance Amount, Financier and Finance Date are all completed then the contract is NOT “subject to finance” and failure to be able to pay for the purchase is not a ground for termination.

The Building and Pest Condition sets out when the inspection is to be performed and again it is important to note that if the Inspection Date is NOT “subject to Building and Pest” and issues that would be covered by such an inspection are not grounds for termination.

The Matters Affecting Property provides the place where the seller of the property is able to disclose:

  1. encumbrances on the property that will remain after settlement; and
  2. details of tenancies on the property – please note that leases less than three years will not show up on a title search on the property.

The Reference Schedule then shows details of compliance with Pool Safety, Electrical Safety Switch and Smoke Alarm requirements.

Finally, the Reference Schedule shows any Special Conditions that apply to the contract.

2.Terms of Contract

This is the ‘fine print’ of the contract and in an article of this size, we cannot provide a detailed commentary on each term. However here are some key terms of which you should be aware:

  • Term 1 – Definitions – “business days” – this is a key term given that many conditions are expressed as due within x business days.
  • Term 2 – Purchase Price – whether the price includes GST and what adjustments can be made to the Purchase Price.
  • Terms 3 and 4 – Finance and Building and Pest Inspection Reports and Pool Safety – notice requirements and termination rights.
  • Term 5 – Settlement – times within which settlement must occur and arrangements for handover of keys at settlement.
  • Term 6 – Time – this reinforces that where something is to be done by a certain time it is vital that this timeframe is strictly followed.
  • Term 7 – Matters Affecting the Property – Seller warranties and how issues with encroachment and survey matters do not necessarily give a right to termination.
  • Term 8 – Right and Obligations Until Settlement – that the property is at the risk of the buyer from 5 pm on the first business day following the signing of the contract and how any requests for early (before settlement) possession will be handled.
  • Term 9 – Parties Default – this covers each party’s rights if the other party is in default of the contract.
  • Term 11 – Electronic Settlement – this is a relatively new initiative that will be covered in a later article.
CONCLUSION

Selling a House will for most people be the most important financial decision that they make so we cannot recommend highly enough the importance of reading the contract fully and ensuring that you satisfy yourself on all matters before you sign the contract.

Contact

Urgent Reminder: Queensland’s First Home Owners’ Grant – Don’t Miss It!

The First Home Owner’s Grant, an initiative from the Queensland Government, could help you to buy your first home sooner, however, you need to act now if you want to take advantage of it.

The First Home Owner’s Grant is available for eligible transactions dated on or after 1 July 2016 but is only on offer until 30 June 2017.

If you are thinking of buying or building a new home, this one-off payment of $20,000 will help you get started. You can even buy off the plan, or choose to build yourself. Depending on the contract date, you may be eligible to receive $15,000 to $20,000 towards buying or building your first home.

Of course, there are certain criteria that apply for you to be eligible for this grant, and also conditions which may apply depending on your eligibility.

For more information, see our recent blog post called Understanding QLD First Home Owners Grand 2017

https://www.aylwardgame.com.au/understanding-queenslands-first-home-owners-grant-2017/

Need advice? How can we help you?

Time is running out on this fantastic initiative from the Queensland Government, act now so you don’t miss out!

You can also visit our friends at Nectar for a finance quote.

Engaging a solicitor to assist is the best option. For more information on the First Home Owners’ Grant or to seek legal advice on purchasing your first home, please contact us.

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AYLWARD GAME LOGO LIGHT
1800-217-217
For more information on current news, property law and other topics of legal interest please visit our Brisbane law news section.
To speak with an expert in the area, contact 1800 217 217 to arrange a quality legal consultation.

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The hidden costs of property investment that nobody talks about

Are you considering investing your money into an investment property and becoming a property investor?

If yes, you need to know what costs are involved and how to establish the best ownership structure for your asset. As many newcomers find out – it is not always a simple process to make an investment, especially in property, and it can be even more challenging to find the best ownership structure that fits your needs and requirements whilst minimizing your long-term costs.

To avoid any unpleasant surprises, it is advisable to do some research first and become well aware of the hidden costs that nobody talks about:

  • If you have never invested in any kind of real property before, it may come as a surprise that you will need to have financial means to cover more than just the price of the property.
  • There are certain  costs that must be managed by you, as the investor, so you need to be prepared. The lender’s mortgage insurance is one possible cost, if you are intending to obtain a loan to cover a high percentage of the property’s price.
  • There is also the loan application fee, which may be a few hundred dollars, and the stamp duty and registration fees, which is probably one of the largest fees you will need to pay and will possibly amount to thousands of dollars.
  • Other costs may include building inspections, pool inspections, pest inspections, accountancy fees, a property manager, maintenance and insurance, and hiring a trustworthy and experienced solicitor to help you with the legal part of the purchasing process.
Considerate planning.

There are some items in the checklist which need your careful consideration when you are planning to invest in property and work out affordability.

When deciding to proceed with investment in property, you should also think about the structure of the ownership. Again, the choice depends very much on your set goals, ability to take risks, financial strength, and other aspects. So, you need to put in balance several options and see which one suits you.

Get advice and guidance.

Matters such as your ownership structure offer quite a few options to consider. Individual or joint ownership, ownership through a company, partnership, or trust, or ownership via your Self Managed Superannuation Fund each carry associated risk and reward profiles.

Each structure has pros and cons for your unique scenario, so you will need to look at each option and make the correct choice for you. Doing this in the correct manner right from the start will help you manage your risks and will get you closer to the investment goals you want to reach. Since investing in a property involves a considerable amount of money, you are well advised to do things the right way from the start.

In all this process, there is one part that is often very challenging for most investors. Even if you are an excellent business person and have great management skills, the legal chapter may be hard to tackle. That’s why you need an experienced property lawyer you can trust.

Aylward Game is a Brisbane legal practice with a great reputation and key knowledge in the property law area. Our professional staff are experienced in all aspects of buying and selling a property, both commercial and residential.

Speak with us today on 1800 217 217.

[lex_divider][/lex_divider]

AYLWARD GAME LOGO LIGHT
1800-217-217
For more information on selling, buying and vendor finance please visit our Brisbane law news section.
To speak with an expert in the area, contact 1800 217 217 to arrange a consultation.

Contact

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