1. Insurance
The Property will normally remain at the risk of the Vendor until settlement, however there have been circumstances we are personally aware of where substantial damage was caused to a property by fire prior to settlement, and the Vendors insurance did not cover the damage.
It is advisable to obtain House Insurance upon signing a Contract of Sale as at this time you have an equitable interest in the Property.
It is also likely that if you are obtaining finance from a lending institution, the lender will require you to produce a fully paid up Insurance Policy or Certificate of Currency for at least a six month period showing a minimum replacement value and the the lenders name on the policy as mortgagee. It is usual for a lender to refuse to attend settlement until they have sighted such document.
2. Fees & Taxes
State Revenue Office:
When negotiating a price for the purchase of a property, do
not forget to take into
account the Stamp Duty that will become payable by you at
settlement. Stamp Duty is
normally the biggest added expense to be taken into account by
the purchaser. Stamp
Duty in Victoria is based on the value of the property,
usually the purchase price and
MUST be paid at settlement.
You may be eligible for Stamp Duty exemption or benefits.
Should you require further information on stamp duty exemptions and
benefits, please contact this office.
Land Titles Office:
At settlement, you will also be required to pay fees to the
Victorian Land Titles Office for the registration of your documents.
Included in these fees will be registration fees on the Transfer of Land
which amount will depend on the Purchase price of the property, and
registration fees on the mortgage.
Should you wish to establish how much will be due to be paid
by you at settlement, you
can contact this office for further details.
Capital Gains Tax:
Any prospective purchaser should be aware of the potential tax
liability associated with
the purchase. For example unless the property is used as your
principal residence, you
may be taxed on any profits made by you on the re sale of such
property.
If you intend to sell within 12 months of purchase, or if you
believe you might be affected
by any Capital Gains Taxes, you should contact the Australian Tax Office
or your Accountant.
Bank Fees:
As part of your application to a lending institution, it is
normal for a lender to charge an
application fee. Don't be reluctant to bargain with your Bank
on this. Remember the lending
market is competitive, and they want your business
Insurance Premiums:
As outlined in clause 1 above, it is also likely that if you are obtaining finance from a
lending institution, the lender will
require you to produce a fully paid up Insurance Policy or
Certificate of Currency prior to
settlement. If you are intending to purchase in the future,
start shopping around for
Insurance premiums now.
Conveyancing Fees:
We Care Conveyancing can provide you with an up front fixed
price quote.
Some businesses offer a
fixed price fee for their service but will also charge you for any
disbursements that are incurred in the handling of your conveyance.
With We Care Conveyancing there are no hidden fees, you know exactly what
you will be charged for our services.
3. Before Settlement
Final Inspection:
The Purchaser has the right to inspect the property purchased
within seven days prior to the date of settlement. Contact should be made to
the selling agent who will schedule a time and date for your final
inspection. The purpose of this inspection is to confirm the property is in
the same condition (fair wear and tear excepted) as at the time you signed
the Contract of Sale. Should the results of the final inspection not be to
your satisfaction, you should contact We Care Conveyancing immediately.
Settlement is usually not able to be
delayed, but at least we, as your conveyancer, will have time
to put the vendors
agent/representative on notice that claims against their
client will be made.
If you do not complete your final inspection prior to
settlement and upon taking possession of the property find chattels missing
or the like, it may be difficult for any claim to be made against the
vendor.
Keys:
Unless specified in the Contract of Sale, the keys to the
property you are purchasing are
usually with the Estate Agent and can be collected by you upon
confirmation that
settlement has occurred.
Removalists:
For obvious reasons, arrangements for a removalist should be
made as soon as possible. We Care Conveyancing will endeavor to provide a
settlement time to you as soon as possible, however due to other parties
involved it may not always be possible. For a list of removalists in
your area you can visit the website of
Oz Removalists or simple click on
this link to be directed to
Yellow Pages Online.
Telephone, Electricity & Gas:
We Care Conveyancing will attend to the notification to the local
municipal authority and
the relevant water authority of the change of ownership,
however due to privacy reasons, the connection of the Telephone, Electricity
and Gas must be attended to by the Purchaser. These should be arranged by
the Purchaser prior to settlement
4. Ownership
There are Two Types of Co-ownership.
JOINT OWNERSHIP:
This is usually the choice of married couples and each owner
has an equal share of the
property.
Joint Ownership or Joint Tenants means that if one of the
owners of the property dies,
the property is automatically transferred to the surviving
proprietor irrespective of what is
stated in their own Will.
OWNERSHIP IN COMMON:
This is usually the choice of unrelated parties. It means that
each owners share of the
property whether they be equal or not is owned entirely by
that owner and upon death can
be transferred to whoever they please so long as it is stated
in their Will. In this system of
ownership, tenants can hold unequal shares and same can be
noted on the Certificate of
Title to issue in their names. In the event that you are
purchasing a property for investment purposes, it may be beneficial for
parties to be registered in this matter for taxation reasons. For
advice in relation to the purchase of an investment property you should
contact your Accountant.
5. Buyer Beware
Unfortunately, the principle of "Buyer Beware" applies to all
Contracts signed by a
purchaser and by signing the Contract the Purchaser is deemed
to have fully read and
understood the Contract together with making all necessary and
complete enquiries to the relevant authorities prior to signing.
It is not mandatory for a Vendor to provide all certificates
relevant to a purchaser.
Sometimes the Purchaser must rely on information contained
within the Section 32
Vendors Statement.
We Care Conveyancing will make application for the following
certificates as part of the
conveyancing procedure:-
(a) Land Information Certificate provided by the
appropriate municipal authority
which includes detailing of
outstanding rates.
(b) Water Rate Certificate which also includes sewerage
plans
(c) Certificate of Title search
(d) Buildings Approval Certificate.
(e) Certificate as to Land Tax: Details any land tax
that is outstanding on the
property. The section 32 will will indicate if
there is any
tax payable.
(f) Vic Roads Certificates: Details any current approved
Road Works proposals.
You will find that many conveyancers do not apply for all of
the certificates listed above in order to reduce the amount that they have
to pay out. At We Care Conveyancing we undertake extensive searches to
ensure that the property you have purchased has not been inaccurately
described to you in the Vendor's Section 32 Statement.
The Vendor Statement will not disclose the following:
Whether the property is subject to any structural defects or
problems such as leaky roof,
termites, bushfire prone, broken appliances such as heating,
alarm etc.
Any development proposals for the surrounding area.
Whether or not the land is subject to any contamination or
pollutants.
Details of any final inspections or permits which have NOT
been obtained.
If in doubt, the purchaser should ask the agent to make the
Contract of Sale subject to
special conditions. If you require any assistance
in this regard please contact this office prior to signing the Contract of
Sale.
Swimming Pool/Spa Fences:
If the Property being purchased has a swimming pool or outside
spa which is not fenced,
the obligation to fence the pool or spa in accordance with
Council regulations will inevitably fall on the Purchaser after settlement.
We suggest you talk to the local Council about fencing
requirements prior to signing the
Contract of Sale.
Property Location:
Attached to the Section 32 Vendors Statement should be a copy
of the Plan of Subdivision
of the property. Prior to signing any Contract of Sale, the
purchaser should attend the
property for the purposes of measuring the boundaries of the
land, and ensuring the
location of the land coincides with what is shown on the Plan.
If the Purchaser has any doubts, they should engage the
services of a licensed
surveyor who will be able to check such matters properly, and
thoroughly.
6. Cooling Off
The Purchaser of a property may have rights to avoid the
Contract of Sale, or "Cool Off".
If the Purchaser intends to Cool Off, they must give written
notice of their intention to end
the Contract within three (3) clear business days from the
time that the Purchaser signs the Contract.
If the Purchaser ends the Contract in this way, they are
entitled to a refund of any deposit
monies paid.
PLEASE NOTE: A sum of money may be forfeited. The
Purchaser should take note of
any such conditions within the Contract of Sale.
THE THREE DAY COOLING OFF PERIOD DOES NOT APPLY IF:-
The Property was purchased at auction or within three (3)
clear business days before or
after a publicly advertised auction.
The Purchaser received independent advice from a Solicitor
before signing the Contract.
The Property purchased is used for commercial or industrial
purposes.
The Property is more than 20 hectares in size and is mainly
used for farming purposes.
The Purchaser has previously signed a Contact of Sale for the
same property.
The Purchaser is an Estate Agent or Corporate Body.
7. Finance
If a Contract of Sale specifically conditions that the
Purchase is subject to you obtaining
finance, then it is your responsibility to ensure that you
make every attempt to obtain
finance approval by the specified date. If the finance has not
been obtained by this date, you may request an extension to allow further
time for approval to be given. Should you require such an extension We
Care Conveyancing can make a request on your behalf.
The Contract will also specify the period for when the
purchaser must either withdraw from the purchase (usually two clear business
days, but check the Contract or request the extension. If a written request
for either the Contract to be canceled or an extension is not provided to
the vendor or the vendors agent within this time, the Contract of Sale can
fall unconditional and the Purchaser will be locked into the Contract.
If the due date for finance falls due and the Purchaser has
not been able to obtain finance
approval, they can withdraw from the Contract providing they
have provided written notice to the vendor or the vendors agent, and are not
in default of any other condition of the Contract of Sale. The Vendor may
also request proof that the Purchaser has made immediate application for the
loan, has done everything reasonably required to obtain such loan approval,
and has a letter of decline from the bank or lending institution.
Once you have received an offer of mortgage, it is then your
responsibility to comply with all terms and conditions of that mortgage. You
should also ensure you are aware of any
financial implications by way of penalties or interest upon
early redemption of the mortgage.
Should you also be providing some of your own funds at
settlement, then it is your
responsibility to ensure that the adequate sum in the form of
clear funds (ie a bank cheque) are made available at the appropriate time.
Please be aware that generally, personal cheques, trust cheques, money
orders, credit co-operative cheques, and building society cheques are not
acceptable tender at settlement.
8. Rate Adjustments
Prior to Settlement, We Care Conveyancing will undertake an
adjustment of rates and
outgoings to the property from the date of settlement.
(PURCHASERS PLEASE NOTE in the cases of some land settlements,
the adjustment
will be required to be undertaken as at the day of sale and a
special condition to this effect will be included in the Contract of Sale).
The adjustment of rates will ensure that the Vendors pay all
rates and taxes due on the
property up until settlement date, and Purchaser pays from the
settlement date.
Most Councils will require all rates for the current rating
year to be paid at settlement even
though they may not be due until a later date. This will be
reflected in the adjustments.
The adjustments will also allow the vendor to pay any arrears
and/or outstanding interest on the rates and charges together with fees
pertaining to the discharge of any mortgage or caveat.
9. Caveats
A Caveat is a document lodged at the Land Titles Office to
protect a Purchasers interest in the property pursuant to the Contract of
Sale.
In some cases there can be a delay of up to 90 days or more
from the time the Purchaser
signs the Contract and settlement. In this time, the
Certificate of Title to the property is still
in the name of the Vendor and third parties associated with
the Vendor can place
encumbrances over that title. For example, lending
institutions who have unsecured loans.
The purpose of the Caveat will in effect prevent any other
encumbrances being placed on
the Certificate of Title.
The cost of Lodging a Caveat is $67.90 and will automatically
be withdrawn upon
registration of the Transfer of Land.
10. Settlement
Settlement Date is the date the Purchaser takes possession of
the Property and a specific date is usually referred to in the Contract of
Sale.
A convenient time of day is agreed to by all parties involved
in the matter (Purchasers
representative, Vendors representative, incoming Mortgagee and
Discharging Mortgagee) who will attend a nominated location (usually the
bank of the discharging Mortgagee) at a specific time to effect settlement.
It is not usual for a Purchaser or Vendor to attend their own
settlement.
At settlement, funds by way of Bank Cheques are handed to the
Vendors representative for inspection. The direction of these cheques and
the amounts will have already been advised to the Purchasers representative
in writing.
Documents required to Transfer the property out of the Vendors
name and into the
Purchasers name are handed to the Purchasers representative
and incoming Mortgagee
for inspection.
Once good title has been established and all parties are
satisfied, settlement is deemed to have been effected. Both the Vendor and
Purchaser will then be contacted by telephone to be advised settlement has
occurred.
Disclaimer: The information provided on the We Care Conveyancing web site is not intended to be legal advice. Many factors unknown to us may affect the applicability of any statement or comment that we make on the We Care Conveyancing web site to your particular circumstances. It is recommended that anyone reading this information should seek legal advice from a solicitor.
