When buying and selling property in Queensland the real estate agent and the lawyer take on separate roles. The real estate agent is usually employed by the seller to obtain the best possible price for the house.
This means if you are buying then the agent will try and extract from you the highest possible price you are prepared to pay for the property.
On the other hand, the lawyer, is employed by you and works exclusively in your interest.
Whilst sometimes the lawyer and real estate agent are working for different people they are both working towards the same goal ' to get you in/out of the house on the right day with as little hassle as possible.
PRE CONTRACT NEGOTIATIONS
Once you have found the house or unit, you want to buy you need to decide whether you would like any special conditions in the sale contract.
Usually you will do this negotiating with the real estate agent. Generally,the real estate agent will ask you which usual conditions are to be included in the contract. e.g. subject to sale.
Often you will want the property to be subject to a satisfactory building inspection, pest inspection or survey because you will probably be stuck with any problems in these areas which you discover after you sign the contract,unless those problems are extremely serious.
Often the property is being purchased for investment. If so, you should be careful to have the correct company, trust or individual as the purchaser for tax purposes or asset protection and, before you sign the contract speak to us or your accountant. It could cost you double stamp duty if you decide to change the purchaser after you sign the contract.
WHEN BUYING OR SELLING YOU NEED TO CONSIDER:
The sale price and the net amount that you will receive on settlement after any commissions have been paid and after adjustments have been made.
The deposit. Ideally, this should be 10 per cent, but in some cases a purchaser might not have that amount of money available when the contract is signed. The deposit can be paid in stages if the situation dictates. A deposit is not mandatory, but it is highly desirable as an indication of the purchaser's good faith and intentions.
Consider the settlement date carefully. The usual settlement time is 30 days, but we can give you guidance on the time scale that should be allowed for your specific sale.
Remember you or your tenant must have completely vacated the property and left it in a clean and tidy state (unless you sell with your tenant staying).
It is important that you fully list everything you are happy to include in the sale, i.e. furniture, pool equipment, etc. As a general rule if you can easily move it, it will not be with the sale unless you list it as included.
CONTRACT SIGNING 'EXCHANGE OF CONTRACTS':
The 'exchange of contracts' is when both the buyer and seller sign the contract and it becomes legally binding.
In Queensland, often the real estate agent first has the buyer sign and then hands it over to the vendor to sign. In some cases, the vendor may decide to alter the terms of the contract and it will be returned to the buyer for approval and further initialling. Once both parties have countersigned the new terms, the contracts are 'exchanged'.
When buying a unit
If you are buying a unit the real estate agent will provide you with a disclosure statement for approval by you before you sign the contract. The purpose of a disclosure statement is to advise the buyer of any problems with the body corporate, e.g:
How much is in the sinking fund;
Is the body corporate being sued.
It will also provide the lawyer with information in relation to:-
How much the body corporate levies are;
What insurances the body corporate has in place.
When buying a house it is important to remember to take out binding insurance cover for the replacement value of the house, effective from the day the contracts are exchanged. This avoids problems which arise if the house is damaged or destroyed before settlement.
You may assume the vendor's insurance would cover any damage before settlement, but the vendor might not have insurance or it could have lapsed or even have been made void. Therefore your own insurance is imperative.
A number of searches need to be undertaken and paid for to ensure no government department or local authority has any claim against the land and all rates and taxes have been paid.
To comply with time limits created by the contract, search enquiries are sent out as early as possible in the conveyance. Our recommended searches, only covering your property and not the neighbourhood, include:
The title is searched to ensure the land is registered in the name of the vendor, to determine whether there are any mortgages, encumbrances or easements(rights of way, etc.) registered on the title.
If so, we arrange for the vendor to have the mortgages property released and withdrawn on the date of settlement so that you get what we call 'good title'.Details of any easements and encumbrances which affect the property will be pointed out to you.
(b) PLAN SEARCH:
We obtain a copy of the registered plan of the land or unit and send it to you to confirm that the property described in the Contract for Sale is identical with the property which you inspected. Be extra careful to identify car parking and storage areas with a unit you have contracted to purchase.
(c) MAIN ROADS DEPARTMENT:
We search this Department to ensure that it has no proposals for resumption of your land or for proposals to realign existing roads or truncate any part of the land.
(d) LAND TAX DEPARTMENT:
We do a search of the Land Tax Department to ensure the vendor has paid all land tax liability due on the property.
If we did not obtain a clearance from the Land Tax Department or make some arrangement for payment, the Department would be able to recover the land tax owed by the vendor from yourself, because unpaid land tax is the responsibility of the owner of the land, regardless of who was the owner of the land when it first became due.
(e) LOCAL AUTHORITY:
The amount of information obtained in the search varies from local authority to local authority. In general we will receive particulars of:
The local authority rates;
Whether the rates have been paid and whether there are any arrears of rates or interest on arrears;
Whether the property is adversely affected by flooding;
Whether the local authority has imposed any charge which could be recoverable from you as a subsequent owner, e.g. damage to water meters, damage to footpaths, removal of debris;
Whether any orders have been made under the Building Act or otherwise relating to any building on the land or to the demolition of any building;
Whether there are any excess water rates due.
Most Contracts for Sale provide that the balance of purchase price is adjusted to take into account the apportionment of the current rate assessment between the vendor and the purchaser.
Any arrears, penalties or charges payable by the vendor must also be calculated from the search results and adjusted on settlement. The local authority search will generally advise the zoning and town planning requirements of the land.
For a commercial property more detailed information should be obtained from the council, especially the Town Planning Section of the council.
Depending on the location and peculiarities of the property being purchased,other searches will need to be undertaken (e.g. with the Railways Department if the land is adjacent to a railway line or a proposed line).
Sometimes a buyer will request a special search because of concern about a specific aspect of the property. You should discuss all search aspects with us so we can customise the searches, do the right ones and not waste money on unimportant searches or enquiries.
Searches usually take around 21 days to complete, although in urgent cases they can be sped up at extra cost.
COUNCIL BUILDING RECORDS REPORT AND PRIVATE BUILDING INSPECTION REPORT:
We recommend the local council approved private building inspector to inspect any house to ensure that the original building or any alternations or additions have been carried out in accordance with the council's building requirements and that the building has been built properly.
A fee of approximately $200.00 is payable for this service. If building has been done in contravention of council requirements (e.g. garages converted into habitable rooms/pergolas erected, etc.) or without permission, the council may at a subsequent time order you as purchaser to demolish or make good the building work at your expense.
It is important we are informed if a building is under six years old and may have been built by an owner builder. Then a search would need to be done to clarify this and determine whether the house is covered by the relevant Building Services Authority insurance.
Our search of the plan (see Section 6b) will provide details which should be sufficient to confirm the land identified in the contract is the area you wish to buy.
However, the plan does not show everything we need to know.
For instance, it does not tell us:
Whether the fences (if any) are on the true boundaries;
Whether any improvements or structures apparently on neighbouring land encroach on to the property or whether any improvements apparently on the property being purchased by you actually encroach or extend on to the footpath or on to a neighbour's land;
Whether structures are the required distances from the front and side boundaries.
Because of this, we usually recommend that purchasers obtain a survey, but this has to be at the buyer's request because surveys can cost $350.00 or more depending on the property.
To find out if the property is or has been affected by termites, borers, etc.we recommend an inspection by a properly qualified pest exterminator, please ask if you would like us to arrange such an inspection. These certificates cost about $200.00.
PREPARING FOR SETTLEMENT
Usually the balance of the purchase price is requested in the last week before settlement. A bank cheque is the preferred form of payment as it enables a quick clearance of funds and will not delay the settlement.
Personal cheques require at least five days to clear and by law we are not permitted to pay uncleared funds out of our trust account. Bank clearing of cheques can cause very inconvenient delays at the time of settlement if bank cheques or telegraphically transferred cleared funds are not provided.
A pre-settlement inspection is strongly recommended to determine whether all the inclusions you have contracted to buy have been left in good working order by the vendor and the property is left in a clean and tidy condition.
Settlement occurs when the money is paid to the seller and the buyer obtains the title deed and keys. It is not necessary for you to be present. If you the buyer has borrowed money from a bank, the bank will hold the title deed until your mortgage is paid out.
This Information Outline is provided courtesy of Hall Payne Lawyers who are experienced in this area of law. They are located at Level 9, 344 Queen Street, Brisbane, QLD 4000 or call them on (07) 3221-2044 if you would like more information on this legal topic, or you wish to obtain formal advice regarding your situation.
Hall Payne Lawyers are an established Queensland firm practicing in the areas of employment law (unfair dismissal etc), accident compensation (WorkCover,motor vehicle accident, personal injuries), anti-discrimination &harassment, consumer law, family law, wills & estates, criminal law and conveyancing. Hall Payne Lawyers are a founding member of the Australia-wide PeopleLaw group.