Residential Conveyancing: Things to expect and avoid
Buying or selling property in today’s world has almost become the financial norm.
Past generations would purchase a property as a lifelong residence with no thought to ever making a move; acquiring another property for investment purposes never considered. More often than not now however, it has become an investment tool for making money. How times have changed.
The large majority of property transfers are settled hassle-free and without the need for extraneous searches. Unfortunately, there are a few exceptions that highlight the need for thoroughness.
Common errors or oversights relate to:
In the midst of this modern-day obsession with swapping, flipping, and acquiring property it is easy to lose sight of the complex and important nature of property transfer, and how crucial it is to be confident that someone is protecting your rights and interests at every step of the way.
This is why it is so important to have a skilled conveyancer. Someone to make the process of property transfer as smooth and stress free as possible.
There is no denying the fact that purchasing a property is one of life’s major financial decisions. Many of us still pour our lifelong savings into such a purchase; particularly, first home buyers.
However, without the proper searches and due diligence during the transfer of this property a host of scenarios could arise that could turn that purchase into a legal nightmare. For example, soil contamination, latent and patent defects, building covenants, defects in title or easements are a few of the issues which may arise. An experienced, knowledgeable conveyancer will ensure that you avoid such pitfalls.
Buying or selling? – let’s talk about building covenants
Congratulations, you have purchased a vacant block of land as part of an estate, but did you read the building covenants imposed by the developer?
Building covenants can restrict how you may use the property to maintain similar uniformity between properties. Particularly, it can restrict colours of materials, driveway, decks and fence designs, the location of pools amongst other restrictions. Often before making improvements to the property, you are required to first seek approval from the developer to ensure compliance with the general design of the estate.
These requirements cannot be ignored either. Most covenants impose penalties on homeowners if they do not adhere to the strict requirements of the covenants and may require the improvement be rectified or demolished.
Your liabilities do not cease upon entering into a contract to sell the land either. For developers to retain their rights to enforce compliance with the covenants, they may include a requirement that the covenants be passed on to all future purchasers, tenants or successors in title. Importantly, the developer may penalise you further, if you do not transfer the covenants with the sale.
For sellers, it is important that disclosure of the building covenants is made prior to entering into the contract of sale and you notify the developer of the sale. The developer may provide you a deed which is to be passed onto the buyer.
Selling? Don’t forget the solar panels
As solar panels become increasingly prevalent throughout Australia, you may have signed a loan agreement as part of a grant from the government. These grants and/or loans may have a provision requiring that you payout the loan upon selling your home.
Sellers are then shocked to learn that $10,000.00 for example, needs to be drawn from the settlement proceeds to discharge the loan. Even worse, the seller does not payout the loan and transfers the property. A lengthy dispute may then ensue as to whose obligation it is to pay for the solar panels and who actually owns the solar panels.
Buyers can avoid any headaches by inserting a special condition which expressly provides that the solar panels are included in the purchase and warrants that the solar payments will pass to the buyer free from any and all encumbrances.
Deposit deadlines – failing to pay on time
One of the most crucial yet often overlooked conditions is payment of the deposit. Commonly, a deposit is payable on acceptance of the contract meaning when both parties sign.
Should a buyer fail to pay the deposit on the day it is due, the buyer is in default of the contract and the seller is entitled to terminate the contract and recover the deposit as a liquidated debt. This can be a worrying outcome for new buyers who place sizeable deposits on contracts. Further actions can be taken against the buyer to sue for breach of contract which can involve a claim for compensation and/or seek performance of the contract.
Recent amendments to the REIQ contract now allow for the buyer to provide the receipt to the stakeholder (often the real estate agent) to confirm that payment of the deposit has been received on the day it is due. This protects buyers who make payment by electronic transfer but the deposit is not received until the next business day.
Similar provisions apply where a buyer or seller is unable to settle on settlement date. Recently, tragedy struck a young Brisbane couple when the sellers terminated their contract due to their bank not being ready on settlement date. In doing so, the sellers were entitled to retain the $75,000.00 deposit.
Due to hardship suffered by many buyers, amendments have been made to the REIQ contract allowing settlement date to be extended up to 5 business days. However, should the buyer not be in a position to settle after the 5 business days have elapsed, the seller is entitled to terminate the contract, retain the deposit and sue for breach of contract.
We can help
Here at Purcell Taylor Lawyers, we have a team of dedicated and experienced commercial and conveyancing solicitors, determined to ensure your conveyance runs smoothly, and free from these potential traps.
We pride ourselves on the efficacy and thoroughness of our conveyancing services. and make it our business to bring our extensive knowledge of the conveyancing process to the table on every transaction
Happy house hunting!!
Contact our team