When selling a property it is important to see a solicitor to prepare a contract so it complies with the Vendor disclosure. We will prepare and supply the contract to the seller’s real estate agent, explain the contract to the seller and in particular their obligation to provide all the necessary disclosure, have the seller sign the contract and arrange to exchange contracts when a buyer has been found, give notice to the mortgagee such as the bank when the property has been sold so the bank can prepare the discharge of mortgage.
All fixtures are included in the sale without having to be mentioned specifically. However, the safest course is to discuss any items you are unsure of to remove any doubt. It is the seller’s obligation to have smoke alarms installed and to keep the property in the state and condition it is in at the date of contract.
The documents required by the vendor disclosure vary from property to property. The most common include:
- a ‘zoning’ certificate
- a drainage diagram showoing the location of the sewer lines
- a copy of the property certificate
- a copy of a plan for the land issued by the appropriated government authority
- copies of all documents creating easements, rights of way, restrictions, convenants etc
- if it is the sale of a strata unit, a copy of the property and a copy of the strata plan that shows the lot and
- a copy of any by-law giving a right of exclusive use of any common property or granting special privileges over common property
If the required documents are not attached to a contract, the buyer can, without penalty, cancel the contract within 14 days of signing it.
Unless the contract discloses anything to the contrary, the seller is deemed by law to have warranted to the buyer the following:
- the land is not subject to any adverse affectation, such as proposals from some government departments and corporations
- the land does not contain any part of a sewer belonging to a recognised sewerage authority and
- the section 149 certificate attached to the contract specifies the true status of the land as at the date of the contract
Home owners need to consider the possibility of GST liability being incurred on the sale of their property. Generally, the sale of a home would not be liable to GST as long as the home is lawfully, used as a residence after the sale.
The capital gains tax laws are very complex, and owners may need special legal advice about any property they are intending to sell. Generally, a seller does not have to pay capital gains tax if they are ‘natural person’ ( that is, not a company or trust) and the property being sold has been their main residence.
Settlement usually takes about six weeks from the date of the contract. Settlement usually takes place where the seller’s title deeds are located. The settlement takes place between the buyer’s solicitor and the seller’s solicitor and bank representatives if the parties are financing the property.
Investors buying interstate should be aware that individual states have different procedures in relation to acquiring property. For example, in NSW, legislation requires the vendor (seller) to disclose in the contract certain minimum information, whereas in Queensland, the agent usually prepares an offer on behalf of the purchaser to put forward to the vendor.
Convenant – A covenant restricts an owner’s right to do what the owner wishes with the land.
Easement – An easement gives a party the right to use part of a neighbour’s land for a particular purpose
Inclusions – A fixture is something ‘so attached to the land that it must have been intended to remain there permanently’. A fitting is ‘an item that may be lifted up and carried away’.
Vendor – The individual or entity selling the property