Archive for the ‘Home & Units’ Category

Important Information for Sellers

Cooling Off Period

The standard REIQ contract is subject to a cooling off period for the benefit of the Buyer.

The Buyer’s cooling-off period commences when the Buyer or their Lawyer receive a copy of the signed Contract, whichever is the earlier and expires within 5 business days.

The Buyer may terminate the Contract at any time before the cooling-off period ends. However, if they terminate the Contract during the cooling-off period you must, within 14 days after the Contract is terminated, refund to the Buyer any deposit paid under the Contract, less 0.25% of the purchase price. You may retain the .25% of the purchase price.

Time of the Essence

The contract provides that “time is of the essence”. This means that performance of a contractual obligation, for example, obtaining finance or completing settlement by a specified date must be strictly adhered to. If the obligation cannot be met by the specified date, then an extension of time must be formally requested. Sellers are under no obligation to provide any extension of time and may elect to cancel/terminate the contract. In some circumstances, the sellers may be able to sue the buyer for damages and/or specific performance.

If it becomes necessary to extend the settlement date, the sellers are at liberty to charge penalty interest on the balance purchase moneys for each day settlement is not able to be completed.

It is therefore very important when signing the Contract, that dates are checked to ensure that time frames are reasonable.

Buyers Inspection

In most cases, the Contract for sale of a dwelling house will be subject to a Buyers Inspection which includes building and pest reports. The purpose of this report is for the buyer to inform themselves as to whether there are any structural defects in the property. The buyer must act reasonably.

From time to time, it is not uncommon for prospective buyers to seek a reduction in price as a consequence of a building report where there are No structural defects although the report may note certain issues such as a nonworking solar hot water system. Whilst these items may be costly to the buyer, it is not a structural defect and should not be relied upon to terminate the Contract. Nor is the Seller under any obligation to either repair, replace or reduce the purchase price.

Special Conditions

A seller may be asked to agree to certain special conditions. These are additional clauses not covered in the Standard Terms and Conditions attached to the Contract such as a “subject to sale of buyer’s property” clause. If so, a Seller may also request that a “sunset clause” be inserted. This means that your property will not be taken off the market whilst waiting for your buyer to sell their property and if another buyer makes an offer on better terms than the first buyer, the Seller may give the first buyer the option to deem their Contract unconditional or match the terms of the second Contract (eg cash no finance) and proceed with the sale or alternatively, terminate the Contract so that the Seller is in a position to enter into the second Contract.

Unregistered Dealings

If the property is subject to a registered or known unregistered encumbrance or interest which is not disclosed in the contract, the buyer may terminate the contract or claim compensation.

Under the terms of the contract, unless otherwise agreed between you and the buyer, any fixtures, fittings or chattels not included in the sale which are left on the premises after settlement has been effected will be deemed to be abandoned by you and the buyer may appropriate, remove or dispose of the same. Any costs incurred by the buyer in the removal of such property may be recovered against you.

Approved Electrical Safety Switch

Under the provisions of the Electricity Regulation 1994, the sellers are obliged to advise buyers in writing whether or not an approved safety switch for the general purpose socket outlets has been installed in the residence.

Smoke Alarms

Under the Fire and Rescue Service Amendment Act 2006, the required number of smoke alarm/s which comply with Australian Standard 3786 must be installed in every domestic dwelling and you are obliged to notify the buyer in writing as to whether they have been installed or not.

Insurance

The contract provides that the property is to be at the buyer’s risk from 5pm on the next business day after the date of the contract, although, whilst continuing in possession, the seller is required to use the same with reasonable care and may not do anything regarding the property (or tenancies) that may significantly alter them or result in later expense for the buyer. This means that if the improvements on the property and/or any chattels were destroyed before settlement, the Buyer would still be obliged to complete the purchase. However, we recommend that sellers do not cancel building and contents insurance until after settlement has been effected.

Items Included in Sale

Items which are included in the purchase price are all stoves, hot water systems, fixed carpets, curtains, blinds and their fittings, clothes lines, fixed satellite dishes and television antennae and in-ground plants.

Personal Property Securities Register

The Seller must give title to the property free from all encumbrances. This obligation includes providing a release of any security interest over goods or chattels included in the property being sold.

If any security interests relate to goods or chattels being sold with the property, it may be necessary to obtain a release from the secured party of those goods and/or chattels.

Pool Safety

What is a “swimming pool”

A regulated swimming pool is any excavation or structure capable of being filled with water to a depth of 300mm or more including a pool, spa pool/tub or wading pool, but generally does not include a fish pond (or similar ornamental water feature), dam, water tank, watercourse, spa bath in a bathroom (unless continually filled with 300mm or more of water) or birthing pool.

Non-shared pool – obligation to obtain Pool Safety Certificate

Where there is a pool on the property (or on adjacent land used in association with the property) that is a non-shared pool and there is no Pool Safety Compliance or Exemption Certificate in effect, the seller must not enter into a contract to sell the property without giving a Form 36 Notice of No Pool Safety Certificate.

If the Buyer completes the purchase without obtaining a current Pool Safety Compliance or Exemption Certificate at settlement the Buyer becomes responsible for obtaining a Pool Safety Certificate within ninety (90) days of settlement and are also responsible at their cost to carry out all works required (e.g. upgrading the pool fence) to meet the pool safety standards currently in force.

If you have any questions or would like to speak with one of our solicitors, please contact us.

Important Information for Buyers

Cooling Off Period

The standard REIQ contract is subject to a cooling off period.

You can change your mind about purchasing the property during the cooling off period. If, during that time, you decide to terminate the contract, the seller must refund your deposit within 14 days less a termination penalty equal to 0.25% of the purchase price.

Items Included in Purchase

Items which are included in the purchase price are all stoves, hot water systems, fixed carpets, curtains, blinds and their fittings, clothes lines, fixed satellite dishes and television antennae and in-ground plants.

Insurance

The contract provides that the property is to be at your risk from 5pm on the next business day after the date of the contract although the sellers, whilst continuing in possession, are required to use the same with reasonable care. This means that if the improvements on the property and/or any chattels were destroyed before settlement, you would still be obliged to complete the purchase. Appropriate insurance cover should be arranged immediately.

Approved Electrical Safety Switch

Under the provisions of the Electricity Regulation 1994, the sellers are obliged to advise buyers in writing whether or not an approved safety switch for the general purpose socket outlets has been installed in the residence.

Smoke Alarm(s)

From 1 July, 2007, it is mandatory under the Fire and Rescue Service Act 1990 that the required number of smoke alarm(s) which comply with Australian Standard 3786 be installed in every domestic dwelling. The sellers are obliged to notify buyers in writing as to whether they have been installed or not. (For more information, please visit www.fire.qld.gov.au)

Transfer Duty

The Government requires transfer duty to be paid on the Contract within one month of the date of the Contract becoming unconditional. If transfer duty is not paid within this time, the Government may impose penalty duty.

Seller’s Warranties

The seller has a duty to disclose certain matters to you, for example, whether the land is on the Contaminated Land Register, and for improved property, whether it was ‘owner-built’ and whether an electrical safety switch is installed. (For a specific list, please see Clauses 7.2, 7.4 & 7.7 of the Terms of Contract)

The only way to confirm the seller’s compliance is to undertake specific searches or enquiries of the relevant authority. Some searches will take up to two weeks to receive a reply and if they are not received in time to exercise any rights you may have under the contract and/or legislation as a result of an adverse result, then you will lose the benefit of conducting them at all.

There are also certain enquiries which may reveal adverse impacts where you will not be able to terminate the contract. Examples include discovery of unapproved structures, non-compliant swimming pool fencing and flooding.

Property Adversely Affected

If you have not been advised in the Contract that the present use of the property is unlawful, any proposals to alter the dimensions or create a road or railway on or abutting the Property, any access or service to the Property passes unlawfully through another’s land, of any notice to treat or resume any part of the Property or that the Property is affected by the Queensland Heritage Act 1992 or is World Heritage Listed you may terminate by giving notice to the Seller at least 2 days prior to settlement.

Searches which are considered a must are: –

  1. Easements search (if there is an easement on the title)
  2. Survey Plan
  3. Land Tax
  4. Council Rates search
  5. Water Meter Reading
  6. Queensland Transport Search
  7. Department of Main Roads Search
  8. Check search at settlement

These basic searches will not necessarily reveal all problems with the property and further additional searches should be considered.

Additional Searches

We recommend every Buyer consider undertaking some or all of the following searches (as applicable) to confirm good title to the property or to check it has not been adversely affected.

Description Approximate Cost

Local Authority Resumptions (checks claims to resume part of the land by a Local Council); Varies with Council.
Building Approvals (advises what approvals have been obtained for improvements on the land); Varies with Council.
Flood Search (Please note that even if a property has flooded before, this does not necessarily give you a right to terminate the contract, although your financier may impose conditions concerning this issue); Varies with Council.
Drainage Plan (sets out plan of sewer, water and stormwater pipes); Varies with Council.
Planning and Development Certificate (includes description of any planning scheme provisions and designations applying to the premises); Varies with Council.
Property notices (checks to see if the Council has issued any notices requiring work on the property); Varies with Council.
Certificate of Classification (confirms whether or not premises may be occupied). Varies with Council.
Queensland Railway (checks claims to resume part of the land by Queensland Railway); $27.50E
Powerlink (advises whether it has any existing rights over the property or any approved projects affecting it); $55.00E
Contaminated Land (checks to see if the land is registered as a contaminated site); $41.22E
Local Electricity Authority – either Ergon or Energex (advises whether electricity is supplied to the premises and if the authority has any resumptions on the property); $39.06E
Telco Cable Search (searches for any underground cables that would prevent you from building pools, driveways, house extensions or fences); $60.50E
Queensland Building Services Authority (checks to see if the building is covered by building insurance); $29.45E
Mining (checks to see if there are any mines underneath); $63.25E
Bankruptcy (checks to see that the Seller is entitled to sell the land and is not bankrupt); $22.22E
Full search of Body Corporate Records (applicable if buying a unit only – provides a “history” of the body corporate. This search provides details on any disputes or works carried out by the body corporate). Between $145.00 – $330.00

If you have any questions or would like to speak with one of our solicitors, please contact us.