Every contract must include a statement in the prescribed form about the cooling-off period. The law gives the buyer of a residential property 5 business days to withdraw after contracts have been exchanged. Some exemptions do apply and this period may be excluded, shortened or extended. The consequences of a buyer cooling-off include cancellation of the contract, forfeiture of .25% of the purchase price and refund of the balance of the deposit.
Between exchange of the contracts and settlement, we will obtain title searches, zoning certificates, sewer and drainage diagrams, information about land tax and general enquiries about matters affecting the property. It is also important to obtain a pest and building reports, prior to exchange of the contracts or before the cooling-off right expires. Both reports are at the buyer’s expense and there is no right of reimbursement from the seller if the buyer does not go ahead with the purchase.
Most buyers need time after deciding on the house to get approval for a loan to buy it. Contracts can sometimes be exchanged subject to a ‘finance clause’. A finance clause is an escape route or emergency exit for the buyer for a limited period of time. If the buyer cannot obtain finance as described in the clause, the contract can be cancelled. Without a clause, the buyer has only the cooling off period of five business days within which to arrange for a loan or to withdraw from the contract.
When a property is purchased in New South Wales, duty is payable by the buyer to the state government, based on the purchase price being paid. No buyer’s duty is payable if it is the first residential property the buyer is purchasing, as long as the purchase price is under $500,000 and any spouse or de facto has not previously owned a residential property separately or with some other person in any state or territory of Australia.
There are time limits for payment of duty on the contract. If the duty is paid late, interest will be payable.
Title to land in New South Wales is recorded in Land and Property Information, which is administered by the Registrar General. To buy a Strata Title unit is to buy into a democratically governed community of owners. One important condition applies to a purchase of a Strata Title unit. The unit’s seller is required to give the buyer a certificate with details of the maintenance levies payable each quarter.
Purchaser – refers to the buyer
Torrens Title – is the most common land title in Australia. There is only one ‘Certificate of Title’ and once you are registered on that title you are the state-guaranteed owner.
Old System Title – consists of a series of title documents called ‘a chain of title’.
Limited Title – are titles for which the boundaries of the land have not been established by survey.
Crown Land Title – are either a lease from the Crown or a purchase from the Crown that has not been completed.
Joint Tenancy – all parties jointly own the whole property. On the death of one of the party, the survivor(s) automatically become entitled to the property
Tenancy in Common – ownership is in equal shares or in proportions the tenants in common decide on