Conveyancing

What are Deposit Bonds?

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Deposit Bonds are becoming a common part of the conveyancing process. So it is important for vendors and purchasers alike to understand what Deposit Bonds are.

A Deposit Bond is a substitute for all or part of the usual cash deposit. The deposit is typically paid on exchange of Contracts in the conveyancing process. It almost like a form of insurance where the institution providing the deposit bond is saying the purchaser is good for the money.

The term of the deposit bond can be from 6 months to 48 months. Longer term deposit bonds are usual when purchasing off-the-plan property.

Where can you get a Deposit Bond from?

Deposit Bonds can be obtained through specific companies that only deal in deposit bonds, or through your banking institution.

In order to obtain a deposit bond you will need some documents to support your application. Documents such as the following a typically required:

  • Copy of your loan approval;

  • Evidence of funds to complete the purchase;

  • Signed and dated Contract for Sale (if selling existing property)

What is the cost of a Deposit Bond?

The cost varies between institutions and will vary depending on the value of the deposit bond and how long you need it in place for.

What is the benefit of a deposit bond versus cash deposit?

Greater flexibility at auction. You select your maximum bid amount and the deposit is then valid for up to 10% of that amount. You can then retain the same deposit bond for up to 6 months until you are successful at auction.

First home buyers. With high property prices first home buyers may not have access to 10% cash deposit but can get loan approval for excess of 5%. A deposit bond (possibly with the need for guarantor) is therefore an option to avoid committing to a cash deposit.

Buying off the plan. When buying off the plan, typically the vendor invests the deposit in a low interest earning account which you may only get half of the interest earnt on settlement. However, with a deposit bond you can leave your money where it is and still secure the perfect property.

For more information, please contact:

Kylie Fuentes
Licensed Conveyancer & JP
kylie@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

What is a Title Search and What Can it Tell Me?

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Title searches are a requirement for many kinds of matters. However, In New South Wales, it is particularly important to attach a Title Search to a Contract of Sale as it is a requirement when selling your property. Information in this document is important for would be purchasers to have access to so that they can make informed decisions before they exchange contracts. But what is a Title Search?

 

A Title Search is quite simply a current copy of the Certificate of Title for any given property. The Certificate of Title is the official legal record for the ownership of the property and whilst there is quite often a physical paper title, with the move towards e-Conveyancing, the majority of titles are becoming electronic. In New South Wales title information is controlled by Land Registry Services. Completing a Title Search can provide a lot of information regarding a property, including:

 

Owners of the Property

A Title Search will always show you who the current owners of the property are. This can be an individual, multiple individuals or even a company. When multiple people own the property the Title Search will also provide information on how they own the property such as, as joint tenants or tenants in common. If they own the property as tenants in common, the Title Search will also so you how much of the property each individual owns for example 50/50 or 30/70. It is important to check the Title Search when purchasing a property so that you know the people selling it are entitled to do so.

 

Mortgages over the Property

The Title Search will show you whether or not there is a mortgage associated with the property or not. If there is a mortgage on the property, you will be able to find out from the Title Search who the mortgage is with. This is important because when you sell or purchase a property, it will need to be discharged. It is quite often the case that the mortgagee will hold the original Certificate of Title until the mortgage is paid in full.

 

Easements

Having an easement on a title means that another party or parties has the right to cross or otherwise use a portion of the land. For example, it is very common for water authorities to have service locations on properties that they need to be able to access in order to maintain their systems. It is important for property owners and purchasers to be aware of easements as there is often restrictions and a responsibility to respect them. Building illegally over an easement can have serious consequences.

 

Covenants

A covenant is a form of agreement that creates an obligation on the owner of the property. A covenant can be positive (which requires the property owner to do something) or negative (which restricts a property owner from doing a certain thing). Forms of covenants include but are not limited to what kind of fencing needs to surround the property (including colours), to maintain drainage systems or to not leave caravans or tents at the front of the property. It is common for new estates to have covenants to ensure a certain level of aesthetic appeal. It is important to know what covenants apply to a property as you will be required to adhere to them.

 

Caveats

A caveat is a sign that there is someone else who has an interest in that property other than the current owners or mortgagee. In New South Wales, to put a caveat on a property, the caveator must lodge an application with Land registry Services. It essentially serves as a warning to potential purchasers that there may be some unresolved issues in relation to the property or monies owed to the caveator. For example, if there are family law proceedings in relation to the property that have not finalised the owner of the property will not be able to sell it.

 

Leases

This is quite common if you are buying a commercial property with a leasee in the building. This is because any retail/commercial lease of more than three years is required to be registered on the Certificate of Title to protect the tenant’s interests. If you buy a property with a registered lease on it, you will be required to recognise the lease and become the new landlord.

For further information please don’t hesitate to contact:

Christine Johnsen
Conveyancing Assistant
christine@couttslegal.com.au
02 4607 2105

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

What is Mine Subsidence?

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What is Mine Subsidence

This article explains in plain English what mine subsidence is and what are the issues when buying a property in a mine subsidence area.

What are mine subsidence districts?

Mine Subsidence Districts are areas that can potentially be affected by ground movement as a result of underground mining, particularly coal mining. Structures within these districts must adhere to building guidelines so they can withstand ground movement.

These controls are overseen and implemented by the Mine Subsidence Board. When buying a property, the purchaser is notified that they are buying in a Mine Subsidence District at the time of purchase.

 

Is mine subsidence high risk?

In general, mine subsidence is not high risk but there are always some risks when building in a mine subsidence area.

The risk increases if the property is built near, or on top of an old mine. Risks such as landslides increase within these areas. As long as your property is not in one of these areas then it is fine. Anywhere not near or on a landfill are treated as normal property.

To find out whether your property is at risk, contact a valuer. Local valuers know the area where you plan to purchase a property. They are also able to contact council about mine subsidence areas.

In general, if the valuer is unsure whether the area is a high or low risk, the banks automatically assume it is a high risk area.

 

Can I cover my house for mine subsidence damage?

Any surface improvements that the Mine Subsidence Board authorises are protected by the Mine Subsidence Act of 1961.

This means, that any damage to authorised improvements as a result of mine subsidence is covered by the Board, which is funded by a levy on the New South Wales mining industry.

If a building was constructed before the Mining Subsidence District was declared, or the building is outside of the district, then you are automatically covered for mine subsidence damage.

It can be difficult to get cover from insurers for certain properties in a mine subsidence district.

 

What is an MSB certificate?

A Mine Subsidence Board (MSB) certificate declares that you have met certain Board requirements.

Many banks will not lend money to purchase a home in a Mine Subsidence District unless a certificate has been obtained.

There are two main certificates available from the Mine Subsidence Board

  • Section 15B Certificate: A Section 15B Certificate relates to whether the Board requirements for improvements and subdivisions has been met. If these improvements meet Board requirements, then they are eligible for compensation if mine subsidence damage occurs.

  • Section 15C Certificate: A Section 15C Certificate identifies whether or not a claim has been previously paid, or is awaiting assessment of existing mine subsidence damage to a property.

What areas are affected by mine subsidence?

Any areas that are mining towns or have older mines within the area can be affected by mine subsidence. Areas within NSW include (but not an exclusive list, please see further legal advice if you want to find out where you are buying is affected):

  • Appin

  • Bargo

  • Camden (parts of Camden Local Government Area)

  • East Maitland

  • Hue Hue

  • Killingworth / Wallsend

  • Lake Macquarie & extension

  • Lithgow

  • Mitchells flat

  • Muswellbrook

  • Newcastle

  • Patrick Plains

  • South Campbelltown

  • Swansea North Entrance & Extension

  • West Lake

  • Wilton

  • Mandalong

  • Wyong

  • Picton

  • Tomalpin

  • Some parts of Newcastle City Central

For further information please don’t hesitate to contact:

Adriana Care
Managing Partner
adriana@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

The A to Z of Property Law

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Selling or purchasing a property can be an extremely stressful process for both the vendor and purchaser. On top of that, the language used by industry professionals without any further explanation can at times make the process more convoluted and confusing.

Coutts understands this, and also understands that at times you may not want, or have the time to, request further clarification of the words being thrown around by industry professionals. To assist in these situations, we have prepared ‘the A to Z of Property Law’ which provides a short description of words most commonly used in the conveyancing transaction.

A is for…

 

Adverse possession - the exclusive, continual use of someone else’s property without their permission which after a period set down by law, will legally become yours.

 

Agent – conveyancers and property lawyers will commonly use the word ‘agent’ to describe the real estate agent involved in the conveyancing process. This is the real estate agent appointed by property owners to market and negotiate a sale on the vendor’s behalf.

 

B is for…

 

Building Restrictions – these are limits imposed by developers in off-the-plan contracts or vacant land contracts, which enforce certain aesthetic and functional restrictions on the construction of residences. These restrictions can range from the colour of the building, the type of fencing permitted, the materials permitted and the size of the driveway.

 

Broker – an organisation, or individual, who is hired by others to arrange mortgage contracts between lenders and borrowers. Brokers can financially advise purchasers on potential incoming mortgagees and the loan agreements. Their role is separate to the role of a conveyancer, with a broker being the individual responsible for assisting in obtaining final loan approval.

 

C is for…

 

Caveat - A document which can be lodged on the title of a property, with the person who lodged the caveat claiming an interest in the land. Caveats commonly prevent the selling of a property, unless the person who lodged the caveat (the “caveator”) agrees to remove the caveat – this usually occurs when the caveator is paid the sum of money being claimed in the caveat.

 

Chattels - tangible goods in a property which are capable of being removed. Chattels are not automatically included with properties when they are sold, and as such, vendors or purchasers are required to specifically list them as an “inclusion” (for example, pot plants or furniture).

 

Cooling off period – when buying residential property in NSW, there is a five business-day cooling off period after the exchange of contracts. The cooling off period starts as soon as contracts are exchanged and finishes at 5:00pm on the fifth business day after exchange. The cooling off period allows purchasers to withdraw from a contract if they do not receive finance or are not happy with the results of pest and building reports. Only purchasers are entitled to withdraw from the contract in the cooling off period and if they do so, they forfeit 0.25% of the purchase price to the vendor.

 

D is for…

 

Deed - a legal document which formalises an agreement between two or more parties and can at times relate to a property. A deed can be entered into at the same time as a Contract of Sale. For properties in new developments (such as Bingara George or Harrington Grove), a Deed of Covenant is usually entered into between the purchaser’s and the developer, which creates a legal promise to the developer (by the purchaser) that they will meet the building restrictions that apply to the land.

 

Development approval – written approval from the relevant council that grants council consent to commence the development of the property. Development approval is required for certain sized decks, renovations, construction of residences and knock-down and rebuilds.

 

Discharge of mortgage – this is the document provided by the bank once the mortgage listed on the title is completely paid back. Once the discharge of mortgage is registered on title, the mortgage is removed from the title and the property will be owned “unencumbered”. 

 

E is for…

 

Easement – these are legal rights that can be listed on the title and plans of properties, which give one person the legal right to the easement (the “benefit” of the easement), with the other having to abide by the easement (the “burden” of the easement). Easements are lodged on title and are commonly lodged on properties where the legal ownership of land would affect the access to another’s e.g. if you owned an alleyway attached to your house and your neighbour could only access their property through the alleyway, an easement may be lodged on the property for “access”. Other common easements are easements for drainage or easement for sewer.

 

Exchange – this is the date that the contract is dated and is when a legally binding relationship is formed. In order for exchange to occur, both parties have to agree on the contract terms and sign a copy of the contract. 

 

F is for…

 

Fixtures - tangible goods in a property which are permanently attached to the property and cannot be removed. These will automatically be included in a sale, for example an oven, rangehood, or air conditioner.

 

G is for…

 

Guarantor – a nominated person who is legally responsible for paying back the entire loan if the borrower cannot (or will not) make the repayments. The guarantor guarantees the payment of the loan and is often required when lenders are not willing to give a loan to a person on their own. This is most commonly used for first home buyers and for company borrowers.  

 

H is for…

 

Home Owners Warranty – home owners warranty insurance (now known as home building compensation cover) is compulsory insurance that has been regulated in order to protect homeowners from incompetent builders. Home building compensation is required for any building contract that is $20,000.00 or more. Future owners of property are covered for six years in the case of major defects, and two years in the case of other losses. This insurance can only be claimed if the building is unable to complete the works because they are insolvent, have died or disappeared, or had their licence suspended.

 

I is for…

 

Indemnity – contracts for sale or loan documents may contain ‘indemnities’ from the purchaser or the borrower to the other party to the contract. An indemnity is a legal word that creates a contractual promise to compensate the other for any loss suffered or damage incurred.

 

Insurance – lenders will often require evidence of insurance taken out over a property before they will allow the settlement to occur. In NSW, insurance is required to be effective from the settlement date.

 

J is for…

 

Joint tenants - when buying property with two or more people, you can nominate whether you would like to purchase the property as joint tenants, or, as tenants in common. Joint tenant ownership means that the property is owned jointly with the other purchaser, with both owning 100% of the property together (and not 50% each). In the event that one owner passes away, the other owners will automatically obtain the deceased share of the property, regardless of what is in the deceased will.

 

K is for…

 

Keys – keys to the property will be available to the purchaser’s once settlement has occurred. As a vendor, you should ensure that the keys are delivered to the marketing agent’s office prior to settlement. As a purchaser, keys can be collected from the agent’s office once settlement has occurred.

 

L is for…

 

Land tax – this is an extra tax that is levied by the government and applies to properties owned that are not a primary place of residence. Land tax is charged if the combined value of land owned (not including any buildings on the land) is over the threshold of $629,000.00 (this is the NSW threshold for 2018). You do not have to pay land tax on your principle place of residence (see P).

 

Lessee – this is the tenant of a property, who is leasing it from a lessor.

 

Lessor – this is the owner of a property who leases it to a tenant. This is also known as a landlord.

 

Licence agreement – this is a legal agreement that can be arranged between a purchaser and a vendor which allows the purchaser to move into the property before settlement. Under a licence agreement, the purchaser may be required to pay a weekly fee to the seller, similar to rent, and is usually responsible for the legal fees in preparing the document of the seller.

 

M is for…

 

Mortgagee – this is the financial lender who has agreed to provide you funds to purchase property.

 

Mortgagor – this is the property owner who has agreed to mortgage the property as security for a loan.  

 

N is for…

 

Notice to complete - In NSW, many contracts for sale include a provision that allows for a “notice to complete” to be issued if a party to the contract is in default (e.g. they are late in settling). Notice to completes’ are issued by the non-defaulting party’s representative and gives the defaulting party 14 days to rectify the default. If the default has not been rectified by the due date, the non-defaulting party then has the option to terminate the contract and keep the deposit paid.

 

O is for…

 

Occupation certificate - A certificate arranged by the builders of a property, which allows a person to occupy the building. This certificate verifies that the certifying authority (whether it is the relevant council or a private certifier) is satisfied that the building is suitable for occupation as it meets the requirements of the Building Code of Australia and relevant development consent. For off the plan purchases, settlement usually occurs 14 days from the date the purchaser received the occupation certificate.

 

Off-the-plan purchase – this is when a purchaser enters into a contract to purchase a property that has not yet been built. Off-the-plan purchases encompass the land and the building in one contract, and as a result of this, the contract length can be several years.

 

This differs greatly from house and land packages, where there are two separate contracts for the land purchase and the build. In these situations, the land purchase is required to be settled before the build commences.

 

P is for…

 

Proprietor – the legal owner of a property e.g. if you are the proprietor of the land, you are the owner on title.

 

Principal place of residence – this is your main residence. Your principal place of residence is exempt from capital gains tax and from land tax.

 

Plans – these are the plans of subdivision that demonstrate the size of the land, whether the land is benefited or burdened by easements or the like, and displays the other lots included in that plan of subdivision. In NSW, plans can be a deposited plan, strata plan, or community title plan.

 

Q is for…

 

Quid Pro Quo – in order for a contract to be valid, there must be quid pro quo or consideration exchanging hands. This means that you do something in order to receive something. In terms of property law, the paying of money to receive the property satisfies the Latin principle of quid pro quo.

 

Quite enjoyment – when you own or lease a property, you have a right to the quite enjoyment of the property, to the exclusion of all others.

 

 

R is for…

 

Rescission – this occurs when purchasers wish to withdraw from the contract during the cooling off period. The effect of a rescission is that the contract is revoked and is no longer enforceable.  A purchaser must rescind a contract prior to the expiration of the cooling off period for the rescission to be valid.

 

S is for…

 

Settlement – this is the word that is used by industry professionals to describe the date and time that ownership passes from the vendor to the purchaser. In order for this to occur, the purchase monies, ownership documentation and transfer of ownership documentation are all required to be at the same place, at the same time. This signifies the end of the contract and is where the property is officially sold/purchased.

 

Section 66W certificate – a section 66W certificate is a certificate prepared and signed by the purchaser’s conveyancer or lawyer and waives the benefit of a cooling off period. This means that, once the contracts are exchanged, both the purchaser and vendor are locked into the contract. If contracts are being exchanged this way, it is important that purchasers have obtained their formal loan approval and satisfactory pest and building reports prior to the exchange.

 

Stamp Duty – stamp duty (which is now known as transfer duty in NSW) is a tax levied by all states on the purchase of properties (or the transfer of land). This tax is regulated by state government and some concessions and exemptions apply to particular circumstances (e.g. first home buyers). Stamp duty must be paid on or prior to settlement in NSW.

 

T is for…

 

Tenants in common - when buying property with two or more people, you can nominate whether you would like to purchase the property as joint tenants, or, as tenants in common. Tenants in common means that each purchaser would own a portion of the property that is specified in the transfer of land e.g. 50/50 split, 99/1 split etc. In the event that one owner passes away, the deceased share of the property will form part of their estate, which is then passed down in accordance with their will.

 

Transfer of land – this is the legal document that is lodged at the land titles office to formally transfer the ownership of the land from the vendor to the purchase. This document is required to be signed by the vendors prior to settlement.

 

U is for…

 

Unconditional – this is a word that is often used by industry professionals to describe a contract that is no longer subject to any conditions. An example of this is once the cooling off period has expired, or, an exchange occurred on a section 66W certificate. This means that both parties are locked into the contract and will be proceeding with the purchase/sale.

 

V is for…

 

Vacant Possession – if this is marked on the contract for sale, the vendor is promising to sell the property with no one living in it at the time of settlement. This means that the vendor is required to vacate the premises by the settlement date, enabling the purchasers to move in once settlement has occurred. The alternative to this is selling with an existing tenant, meaning, the property is being sold with a lease agreement attached to the contract for sale.

 

Vendor – this is the seller of a property. This is the person who is legally entitled to the sell the property and is usually listed on the title as the owner.

 

W is for…

 

Waive - If there is a condition in the contract that has been included for your advantage, you may wish to waive the benefit of that condition. In this instance the condition will no longer stand, and the contract may become unconditional. This is common in contracts that are subject to finance approval, or due diligence deadlines.

 

X is for…

 

eXtra careful – if you have any doubts or concerns about your property sale or purchase, it is vital that you consult the relevant industry profession to obtain expert advice. 

 

Y is for…

 

Yard – as a vendor, if you have specified that you will be selling the property with vacant possession, it is important that all rubbish and items are removed from the yard prior to settlement. If this does not occur, the purchaser may argue that vacant possession has not been provided and as a result may also attempt to delay settlement until it is provided. 

 

Z is for…

 

Zoning – this refers to the rules and regulations that are dictated by local or municipal levels of government. The zoning of a property specifies what type of development can and can’t be done on that property, and, what type of development requires developmental consent.

If you have any questions or for further information contact:

Allyce Silm
Lawyer
allyce@couttslegal.com.au
02 4607 2119

 

 

 

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

NSW vs QLD – who triumphs when it comes to stamp duty?

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Stamp Duty – what even is it?

Stamp duty is a tax imposed by the relevant state government on real estate acquisitions and purchases. Stamp duty is payable in addition to the purchase price, and, the amount that is charged is regulated by the relevant state government in which the property is located in. The amount of stamp duty that a purchaser is required to pay is also dependent on the purchase price of the property.

 

Stamp duty (or “transfer duty” in QLD), is payable by purchasers during the conveyancing process and is, at times, considered as a ‘surprise expense’ in the process. Many purchasers are not aware that stamp duty must be paid prior to the transfer of land (which registers the property into your name) being accepted by the titles office. Although some purchasers may be eligible for concessions and exemptions, the payment of stamp duty is an inevitable expense associated with purchasing a property. 

 

Did you know?

The relevant due date for stamp duty depends on which state you will be purchasing in – it is therefore essential that, as a purchaser, you are aware of the stamp duty regulations in the applicable state. This blog will briefly touch on NSW and QLD.

 

New South Wales

In NSW, it is usual process for conveyancers or lawyers to advise purchasers of the stamp duty amount, and to also process the duty on the purchaser’s behalf.

Unfortunately, unless you are buying an “off the plan” property and will be living in it after settlement, stamp duty must be paid within 3 months of the date of exchange (this is the date of the contract). This means that you will be required to have the funds available for the payment of stamp duty within 3 months of exchange, even if you are purchasing unregistered land (or an off the plan investment) that will not be ready for two years. If stamp duty is not paid within 3 months of the date of exchange, the State Revenue Office will charge interest on the unpaid stamp duty amount until such time that it is paid.

Purchasers can estimate the stamp duty payable prior to making an offer on the property by utilising the Revenue NSW calculator here.

Queensland

Similar to NSW, conveyancers or lawyers dealing with QLD purchasers can advise on the stamp duty (transfer duty) amount and can also process the duty on the purchaser’s behalf.

In QLD however, transfer duty is usually not payable until settlement. This is because, in QLD, transfer duty is payable within 30 days of an “unconditional” contract. As most contracts are conditional upon an event occurring in QLD (for example, the contract being conditional upon the purchaser obtaining finance, or conditional upon the draft plans of subdivision being registered) the 30-day deadline to pay transfer duty starts once these conditions are met. In most conveyancing transactions, this means that transfer duty is not due and payable until settlement.

This extended due date of transfer duty then gives purchasers a plethora of finance options in relation to the payment of duty i.e. they can account for the duty in their application for finance,  or, they can save whilst waiting for the land to register and can then draw from their own funds. 

Further information in relation to transfer duty in QLD can be found here.

 

For further information contact:

Allyce Silm
Lawyer
allyce@couttslegal.com.au
02 4607 2119

 

 

 

NSW Supreme court rules against sunset date clause in a landmark win for buyers.

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Off-the-plan buyers today won a massive victory in a landmark Supreme Court judgement and major test of new legislation to protect property purchasers.

A developer purported to terminate 12 off the plan contracts in a a new building in Surry Hills.  The developer argued that it was entitled to rescind the buyers contracts because of numerous problems with the development, meant completion of the project pushed the completion beyond the sunset clause dates in the contract, therefore entitling the developer to rescind the contract.

The purchasers took action against the developer because they believed the developer was merely trying to cancel their contracts so the developer could obtain a higher price in an increasing market.

Justice Rowan Darke on Wednesday ruled the developer had not acted justly or equitably in trying to rescind the contracts. He dismissed the developer’s plan to rescind up the contracts, and the purchaser’s were permitted to complete their purchase.  This is the first case to test the new laws that was introduced by the government significant changes to the legislation to protect buyers against developers trying to enact sunset clawbacks to increase their profits.

Read the full story on Domain here.

For further information and property law advice, please contact:

Adriana Care
Partner
info@couttslegal.com.au
1300 268 887

 

 

 

Purchasing Rural Property - What you need to know!

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There are many different considerations when purchasing rural property, in comparison to the usual block of land in the suburbs. If you haven’t owned rural property in the past you may not be aware of some of these differences.

Set out below are some additional considerations for you to be aware of before making an offer on that rural property.

Cooling off periods and Rural Property

A cooling off period is a standard expectation when purchasing property, however if you are purchasing a property that exceeds 2.5 hectares (6.2 acres) then the property is considered rural and a cooling off period, under legislation, no longer applies. This means it will be important for you to undertake all of your enquiries before paying any deposit or exchanging Contracts. In undertaking your enquiries you may consider the following unconditional loan approval if you are obtaining a mortgage, legal advice on the Contract, pest and building report on the dwelling, whether relevant approvals for structures have been obtained from local council or other relevant authorities.

Crown Roads

It is important to consider how you gain access to the property you are looking to purchase – do you have direct access to the main road or is it access by a side road? Is the property ‘land-locked’? If you access is via a side road this side road may be a Crown Road. There is currently an undertaking by the NSW Government to close Crown Roads, particularly where they are not required for public access. In this situation where a Crown Road is being closed the affected lot owners are given the opportunity to purchase the area of land to maintain access to the property. This may need to be organised in conjunction with neighbouring land owners. Below is an example of a property that is ‘land-locked’ being the area marked ‘85’ and the method of access is via the orange and orange and black sections. These sections are the Crown Roads.

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The benefit of purchasing the Crown Road relating to the property is that it removes the need for an enclosure permit or ongoing payment of rent for use of the Crown Road and expands the potential uses of the land (as under an Enclosure Permit it can only be used for grazing). It is important to ensure your method of access is secured and you have an understanding of any ongoing costs associated with ownership of the property, aside from the usual rates.

Local Land Service Rates

accessed from https://www.lls.nsw.gov.au/annual-rates

Is the Property over 10 hectares? If so, then Local Land Service Rates may apply. These rates are on top of the normal Council Rates and are specific to the land. As such your conveyancer will undertake enquiries during your matter to ascertain the applicable Local Land Service Rates payable and ensure they are adjusted on settlement. Local Land Service Rates are used to provide services to landowners as insurance against pests and disease and this can include:

  • the coordination of programs to control declared pest animals and insects, including access to baits, traps and chemicals, advice on control methods and assistance in forming groups to tackle pests

  • the provision of animal health services, including animal health and drought feeding advice, diagnosis of flock and herd issues and response to emergency disease outbreaks

  • the administration of stock identification systems, including property identification codes, brands, earmarks and compliance with the National Livestock Identification System

  • the local administration of drought and other natural disaster relief

  • the delivery of agricultural emergency management assistance for drought and other natural disaster relief (bushfires, floods).

Water Access Licences

Is the property connected to town water, tank water, bore water or pumped direct from a river source? This is a question to ask when meeting with an agent regarding purchasing a rural property. If the property is connected to bore water or water is pumped direct from a river source it is important to let your conveyancer know when you meet with them as additional conveyancing work and enquiries will be required in this regard. In these circumstances, it is likely there is a Water Access Licence attached to the property. These licences provide details on: category of water licence, duration of the licence, specific conditions, method of extraction and nominated works. If you proceed to purchase the property then the Water Access Licences will be transferred into your name the same as the ownership of the property so it is to be considered if there are any applicable water fees and charges which would generally be adjusted on settlement by your conveyancer.

For any further advice or legal assistance on this issue, please contact us at Coutts on 1300 268 887

PEXA: Dispelling the myth from the facts

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Melina addresses the elephant in the room dispelling the myth from the facts about PEXA and electronic settlements.

 

As reported by the Sydney Morning Herald, two Victorians recently lost $1.25 million between them, due to a computer hack. Similar stories were aired on Nine News and news.com.au

Property Exchange Australia’s e-transfer system is already mandatory for some transfers of title in NSW with the balance of transfers becoming mandatory from 1 July 2019.

 

So what happened…

Based on the information provided by the legal industry and the media, we understand that the Conveyancers emails were hacked. The hackers obtained the Conveyancers PEXA login information from their emails and used them to log into the PEXA system. Once logged into the system as the Conveyancer, they added themselves as a user. From here they entered their account details for the surplus funds in place of the owner’s.

 

What have PEXA done since this happened…

Since the computer hack, PEXA have implemented a number of additional security measures including increased monitoring of accounts to detect unusual activity, changing the way new users are added to the system, introducing a two-step login process and a Residential Seller Guarantee.

We recently experienced this first hand. We had a new staff member join the property team and added her as a user in the PEXA system. This staff member was not immediately able to access the system. Instead, a member of the PEXA team phoned the office to confirm it was, in fact, our office that added the user. Only once this was confirmed with PEXA over the phone did they allow this additional user to start accessing the system.

The two-step login process, which has also been implemented since the hacking incident was reported, involves a login with a password and a code. The code is sent to a mobile device, once the email address and password are entered. Only after inserting both the password and then the code sent to the mobile device can you enter the PEXA system.

The PEXA Residential Seller Guarantee provides protection to sellers in the event of fraud. It gives the seller the option to make a claim under the Guarantee, rather than trying to recover the costs another way if their funds have been misdirected.

 

What should I consider as a seller or a buyer whose transaction may be completed in PEXA…

  • PEXA has assured the industry that the platform is secure

  • The incidents were isolated – our firm has been transacting in PEXA since 2015. We have not encountered any incidents where funds were misdirected and all our clients have been very pleased with the system

  • Ask your Conveyancer about the security systems and procedures they have in place to protect against hackers

Stay tuned for more information about PEXA and e-conveyancing as we get closer to the mandating dates.

For further information contact:

Melina Costantino
Licensed Conveyancer
melina@couttslegal.com.au
02 4607 2104

First home buyer but struggling to buy on your own?

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Are you a first home buyer wanting to enter the property market, however are not able to purchase or finance a property on your own?

It is commonly assumed that when a first home buyer purchases property with a non-first home buyer, that they automatically “give up” the first home buyer incentive of an exemption or concession from stamp duty under the First Home Buyers Assistance Scheme.

 

However, this is not always the case. The First Home Buyers Assistance Scheme provides for Shared Equity Arrangements, which specifically allows eligible first home buyers to purchase with a non-first home buyer and still receive an exemption or concession on the portion of stamp duty due on their share of the property.

 

Sharing equity is a way to share the cost of buying property with another party, who is referred to as an equity partner. Accordingly, Shared Equity Arrangements are designed to assist first home buyers enter the property market even if they are unable to purchase a home on their own. For example, a first home buyer may purchase with their parent or a sibling as an equity partner in order to be able to obtain sufficient finance.

 

To be able to utilise Shared Equity Arrangements, the first home buyer must purchase at least 50% of the property and meet all other eligibility requirements. The First Home Buyer Assistance Scheme will then be applied to the first home buyer’s share of the property.

 

The balance of stamp duty payable is calculated on the portion of the property to be owned by the non-first home buyer. If the non-first home buyer will own less than 5% of the property, then their portion will be disregarded and the first home buyer’s exemption or concession will be calculated as if they were purchasing the property on their own. 

 

It is important to note however that a first home buyer is not able to utilise Shared Equity Arrangements with their spouse, or even with another non-first home buyer should their spouse have previously owned residential property in Australia.

 

If you are a first home buyer wishing to purchase a property with a non-first home buyer, please contact us and we can assist you in determining whether you are eligible for Shared Equity Arrangements and guide you through your first property purchase.

 

For further information contact:

Natali Vujica
Licensed Conveyancer and JP
natali@couttslegal.com.au
02 4607 2108

 

First Home Buyer Incentives Recap

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A year after the first home buyer incentive reforms were introduced on 1 July 2017, it is a good idea for aspiring first home buyers contemplating entering the property market to refresh themselves with the current first home buyer incentives, which are as follows:

 

Existing Homes

-          Exemption from stamp duty for property valued up to $650,000.00

-          Concessions on stamp duty for property valued between $650,000.00 and $800,000.00

-          No stamp duty on Lender’s Mortgage Insurance

 

New Homes

-          Exemption from stamp duty for property valued up to $650,000.00

-          Concessions on stamp duty for property valued between $650,000.00 and $800,000.00

-          $10,000.00 Grant for the purchase of a new home valued up to $600,000.00

-          No stamp duty on Lender’s Mortgage Insurance

 

Off the Plan

-          Exemption from stamp duty for property valued up to $650,000.00

-          Concessions on stamp duty for property valued between $650,000.00 and $800,000.00

-          $10,000.00 Grant for the purchase of a new home valued up to $600,000.00

-          A 12 month delay in payment of stamp duty (where applicable), deferring payment of stamp duty from 3 to 15 months from the date of exchange

-          No stamp duty on Lender’s Mortgage Insurance

 

Vacant Land

-          Exemption from stamp duty for land valuated up to $350,000.00

-          Concessions on stamp duty for land valued between $350,000.00 and $450,000.00

-          $10,000.00 Grant for a contract to build a new home or to owner build on the land with a total value up to $750,000.00

-          No stamp duty on Lender’s Mortgage Insurance

 

Please note that eligibility requirements apply to all incentives. If you are a first home buyer, we can assist you in determining which incentives you may be eligible for and guide you through your first property purchase.

 

For further information contact:

Natali Vujica
Licensed Conveyancer and JP
natali@couttslegal.com.au
02 4607 2108

 

Surcharge purchaser duty exemption/refund for Australian-based developers

On 21 June 2016, the NSW Government introduced surcharge purchaser duty “surcharge duty”, payable by foreign persons or entities purchasing residential property. As the name suggests, surcharge duty is payable in addition to transfer duty (previously known as stamp duty). When first introduced, surcharge duty was 4% of the purchase price/value. On 1 July 2017 it increased to 8%.

 

We have recently seen some changes to the Duties Act 1997 “the Act”, specifically, the addition of s104ZJA. This section of the Act provides:

1.     an exemption from surcharge duty; and

2.     a refund of surcharge duty, paid prior to the introduction of s104ZJA.

 

The exemption and refund apply to foreign-owned, Australian-based developers who satisfy the following conditions:

a.     Following completion of the transfer, a new home was constructed on the land and then sold to a non-associated party without the home having been occupied (other than as a display home); or

b.     The land has been subdivided for the purpose of the construction of a new home and then sold after the issue of a subdivision certificate.

 

No surcharge duty is payable if it is determined that foreign-owned, Australian-based developer is an exempt transferee. If the Chief Commissioner determines that the foreign-owned, Australian-based developer is likely to become entitled to a refund of the full amount of surcharge duty, then they may approve them as an exempt transferee. The approval as an exempt transferee is subject to conditions and can be revoked at any time.

 

Time restrictions apply in relation to making an application for a refund of surcharge duty.

 

We are pleased to have been the first firm to apply for and to have received, an exemption from surcharge duty on behalf of our client.

 

It is not currently possible to process an exemption from surcharge duty on EDR. As such, an application is required to be made by written submission to Revenue NSW.

 

The application for an exemption from surcharge duty must include the grounds for exemption and must enclose the Contract, Transfer and Purchaser/Transferee Declaration together with a statutory declaration stating the Purchaser will meet the requirements set out in s104ZJA of the Act.

 

For further information contact:

Melina Costantino
Licensed Conveyancer
melina@couttslegal.com.au
02 4607 2104

What is a Reverse Mortgage?

Whilst there are good reasons for entering into a Reverse Mortgage, mortgaging your home can have a serious impact on your finances and the quality of life you may hope to live once you have retired. It is important to understand what a Reverse Mortgage is, what is expected of you by the lender and the potential risks involved by entering into this kind of agreement.

What is a Reverse Mortgage?

A Reverse Mortgage is a home equity loan. This means that it is a type of mortgage where you can borrow money, using the equity in your home as security. You can receive the borrowed funds as a lump sum, a regular income stream, a line of credit or a combination of these options. Generally, you are not required to have an income to qualify and you do not have to make repayments whilst you live in your home. You remain the owner of your house and can stay in it for as long as you want to. Like any other loan, interest is charged. The interest compounds over time and is added to your loan balance. You will need to pay for the loan in full when you sell your home, move into an aged care facility or pass away. This will include any interest or fees attached to the loan.

What do I need to consider before I enter into a Reverse Mortgage?

Entering into a Reverse Mortgage can give the borrower access to tax free funds for their needs which offer flexible repayments scheme, depending on your lender and the agreement. However, there are some risks that should be considered before entering into an agreement:

  • The interest compounds over the term of the loan. This means the debt can become quite significant.
  • The loan may mean you are no longer eligible for a pension or Centrelink benefits.
  • Interest rates are generally very high.
  • If you have to move into an Aged Care facility, there may not be enough money left over once you sell your house and pay off the debt for you to be able to afford it.
  • There will be less funds for you to gift to loved ones once you have passed.
  • There may be special conditions in the agreement – for example you may be required to maintain the property in good condition which may be difficult if you have health conditions which affect your ability to do so.

How can we help?

A Reverse Mortgage has the potential to assist the right person but there are many things to consider before entering into this type of agreement. Usually, the lender will provide you with many documents including booklets of information to help you understand what is involved in this type of loan. However, it is important that you are 100% aware of your obligations, the risks to you personally, the costs involved and what this agreement means for you as an individual.

We can answer any questions, help you with the documentation and help you to understand your legal position before entering into a reverse Mortgage.

For further information contact:

Carrie Alton
Lawyer
carrie@couttsmallikrees.com.au
02 4036 3307

 

GST on purchases of property after 1st July 2018

Legislation has been passed to change the way GST is paid to the Australian Tax Office (ATO) in relation to purchases of new residential premises or new subdivisions of potential residential land.  These new provisions are expected to take effect on and from 1 July 2018.

This means that if the Contract has been entered into on or after 1 July 2018 then the new provisions will apply.

To gain an understanding of what type of purchases the new provisions will affect it is necessary to consider what is meant by ‘new residential premises’ and ‘new subdivisions of potential residential land’.

New residential premises

New residential premises are currently defined for the purposes of GST as residential premises that have been built to replace demolished premises on the same land or property not previously sold as residential premises.

New subdivisions of potential residential land

This term is not currently defined for the purposes of GST, however it is understood that the intention is to capture subdivisions that do not contain buildings used for commercial purposes.  In particular, it is expected to relate to land sold as part of a house and land package where the purchaser settles prior to the commencement of construction of the dwelling.

 

Notification by developer or supplier

The developer or supplier will be required to provide a withholding notice either as part of the Contract or no later than 14 days prior to settlement, once the notice is received payment of GST prior to or on settlement will be required.  This will be required in almost all circumstances, even where it is clear no taxable supply is being made, for example where a vendor is not registered for GST purposes.

 

When and what is being withheld?

Following receipt of the notice for the developer or supplier, if a withholding amount is required then:

  • amount being 1/11th of the purchase price; or

  • if the margin scheme applies then 7% of the purchase price,

will be required to be withheld and remitted to the ATO on or before the day of settlement.

 

Penalties for non-compliance

If the developer or supplier do not notify the purchaser then relevant penalties apply and if the purchaser does not withhold and remit the correct amount to the ATO then relevant administrative penalties apply.  However, if the purchaser is relying on notification from the developer or supplier then penalties will not apply.

 

Exceptions

What is the date on the Contract?

If the Contract has been entered into prior to 1 July 2018 and the purchase price (not including the deposit) is first paid prior to 1 July 2020 then the new provisions will not apply.

This level of exception will require all parties to be vigilant, particularly where there are delays in completion.

 

Finally…

As the new legislation is finalised and brought into practice it will be important for all parties to take into consideration each transaction that may be affected.  In particular, Contracts for unregistered land with sunset dates and extensions to sunset dates that could result in the Contract to be subject to the new provisions.

For further information contact:

Coutts Conveyancing Team
1300

 

Illegal waste dumper jailed in the NSW Land and Environment Court

On Thursday, 31 May 2018, Dib Hanna was sentenced to three years in prison, being the first person to be jailed in the NSW Land and Environment Court under the 2014 anti-dumping legislation.

 

Mr Hanna is being called Sydney’s most notorious waste dumper after repeatedly been caught illegally dumping asbestos over the past ten years.

 

The NSW Environment Protection Authority commenced its prosecution in 2016, Mr Hanna failed to appear in Court to answer the charges and he was arrested in Victoria and extradited to NSW.  This was the first time that a person had been extradited in relation to environmental offences.

 

Mr Hanna pled guilty to one charge of illegal transport of waste and four counts of illegal dumping of waste on private properties during 2015 and 2016. 

 

The Court heard that Mr Hanna had advertised free clean top soil, clay and crushed by way of a letterbox drop bitumen and when he was contacted by interested residents he would send truck drivers to dump waste, including asbestos at their homes.  It was found that Mr Hanna instructed the dumping of some 461 tonnes of waste, including asbestos to people’s homes.

 

As well as the prison sentence Mr Hanna was ordered to clean up the dumped waste, pay the Environment Protection Authority’s legal costs and take out newspaper advertisements publicising his punishment as a deterrent to other would-be offenders.

 

Mr Hanna’s sentences was backdated to 17 April 2017, the earliest Mr Hanna can be released is 16 July 2020.

For any further advice or legal assistance on this issue, please contact us at Coutts on 1300 268 887.

Licensed Conveyancers & Solicitors - The Basics!

As a Licensed Conveyancer, I act on property transactions day in and day out but I always try to remember that the people I help are not necessarily people who do this sort of thing all the time. Sometimes they are first home buyers and other times they are people who just haven’t bought or sold in years. Because of this, I find it’s so important to get back to basics and give simple answers to common questions, none of this legal jargon. So in saying that…

What is a Licensed Conveyancer?

A Licensed Conveyancer is a legal professional who facilitates the legal process of buying or selling for you.

 

What is the difference between a Licensed Conveyancer and a Solicitor?

 

A question I get a lot is whether a Licensed Conveyancer is the same as a Solicitor. The short answer is no. In saying this, when buying and selling, a Licensed Conveyancer provides the exact same service that a Solicitor would.

 

The key difference is that a Licensed Conveyancer only practices in the area of Property Law and a Solicitor is qualified to practice in other areas of law.

 

Both Licensed Conveyancers and Solicitors are qualified and regulated professionals who can act for you in relation to your property transaction.

 

Another question I get is ‘If I instruct a Licensed Conveyancer, do I still need a Solicitor?’. The answer to this is also no. You can instruct a Licensed Conveyancer or a Solicitor to act on your property transaction. If you instruct a Licensed Conveyancer you don’t also then need to instruct a Solicitor.

 

If you found this information helpful, please share it with your family and friends. You may also want to check out some of our other blogs.

For further information contact:

Melina Costantino
Licensed Conveyancer
melina@couttslegal.com.au
02 4607 2104

Should I buy or build a house?

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Everyone has their own reasons for why they might buy or build a house. We wanted to take a quick moment anyway, with the help of Domain, to list a few considerations for if you're torn between what move you should make. Once you've decided on the best path to suit your needs, your friendly local Coutts conveyancer will help guide you through the processes involved in finalising your purchase. 

Buying an established house

  • Usually requires a quicker process which will see you move in faster.
  • Land sizes are generally larger than what you will find with new builds.
  • Property location is more likely to be more central to established infrastructure.
  • Established houses are more likely to be purchased for investment purposes.
  • If the house is in the right location and if improvements are made, value may be added.
  • Buyers can establish fair market value with nearby sales data available in established areas.

Building a new house

  • This is a popular for first home buyers due to concessions available.
  • Less maintenance issues than with established houses.
  • New house designs are more likely to be energy efficient, delivering long term savings.
  • You can pick a design that suits your family.
  • Building can be a time consuming process with the potential for complications.
  • Building is a perfect option when looking for your forever home.
  • New builds are usually covered by warranties.

Have you made the decision to buy or build recentely and need a conveyancer? Meet your new conveyancer HERE.

I’m separated, can I buy a new property?

I'm separated, can I buy a new property?

If you have recently separated from your partner, you may be looking for a new place to live. You may find yourself chatting to a charming real estate agent who is showing you around the perfect new house. Before you sign the contract and pay the deposit for your dream home, you need to be sure that it won’t become a nightmare. 

Even if you and your partner are amicable, it is important to complete a formal family law property settlement to protect any new property you buy after separation. A property settlement will end the financial relationship between you, but until you do this any new property you purchase could become part of the dispute. For example:

Lisa and Michael were married for 7 years and have been separated for 10 months. Lisa meets Steve and they purchase a new house together. Michael then commences property proceedings and Lisa’s new house forms part of the property pool between her and Michael. She’s required to disclose details such as the address, who else owns the property, purchase price, and loan details. 

A lot of people may think that because they’ve purchased the new property after separation its none their ex’s business. However, until you tie up the loose ends of the marriage or de facto relationship by way of a property settlement, your leaving yourself open to a claim over your new property. Whether or not your ex is successful in their claim is a different story, but the cliché, ‘it’s better to be safe than sorry’ exists for a reason. 

You should note that there are also time limitations which end the financial relationship between you and your partner such as:

  • being divorced for 12 months for a marriage; or
  • being separated for 2 years for a de facto relationship. 

It is important to a speak to a family law solicitor before purchasing a new property to be aware of any potential consequences, the ways to complete a property settlement - which doesn’t always mean going to court, and to see whether you meet any of the time limitations listed above. For more information on time limits when separating have a read online here

Need assistance with a family law property settlement? Contact Coutts today.

To buy or sell first? Part two

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If you are looking to buy a new home and sell your existing home you've most likely wondered whether you should buy or sell first.

There are several things to consider when making this decision so you are best prepared for the journey. In part two here we'll look at things to consider when buying first.

Buying first

Pros

  • There is less pressure to just ‘get’ a new home so you can settle on time – you can really shop around
  • You have greater certainty that you will only have to move once
  • In a quickly rising market you may be able to achieve a higher sale price and secure a better price on your new home

Cons

  • Bridging finance may be required if you do not sell your existing home in time for settlement
  • You won’t have a clear budget for your new purchase
  • You will need to ensure you have a cash deposit sufficient to cover the purchase or be prepared to obtain a deposit bond

Deposit Bond

When buying a property, first you will need consider options for payment of the deposit.  The traditional method of payment of a deposit is cash.  However, when cash is not available like when your equity is tied up in your existing home, a deposit bond maybe a suitable option.

There are private companies that issue deposit bonds and banks can issue the equivalent being a bank guarantee.  Each issuing institution will have different fees and criteria so you will need to investigate these and ensure you comply.

Your conveyancer and mortgage broker can assist in this process.

Bridging Finance

When buying first your ability to cover the mortgage of two properties will be a main consideration.  Bridging finance is an option worth discussing with your mortgage broker.  Bridging finance loans have:

  • shorter terms of between 6 and 12 months;
  • fixed and variable rates are typically still offered;
  • higher interest rates; and
  • Lenders Mortgage Insurance may still apply if the loan is more than 80% of the total value of both properties.

Extended Settlement

As noted above, a longer settlement period of approximately 10-12 weeks (or longer if you are moving to an area where properties are scarce) maybe a necessary consideration.

The downside of an extended settlement is you may need to accept a sale price that is lower than you originally expected in order to sell in time to achieve settlement.

Contingency Plan – Conditional Purchase

A last resort to overcome the cons is to make your purchase dependant on the sale of your home.  As noted above, this can be negotiated be your conveyancer or solicitor.  Keep in mind that a vendor does not have to agree to this request.

Other Considerations

If settlement of both your sale and purchase have been timed perfectly there are some last minute considerations that need to be covered to ensure settlement goes well.

  • Timing for final inspection

When buying property you are entitled to a final inspection of the property within 48 hours prior to settlement.  This is also relevant for the people buying your property.

  • Timing for settlement

If settlement has been timed perfectly it will occur at the same time on the same day.  Otherwise, settlement may need to occur a few days apart to allow funds to clear and cheques to be drawn.  Settlement is most likely going to occur after 2pm as many banks have this requirement.

Do you have to attend settlement – the short answer here is no.  Your solicitor to conveyancer will arrange attendance by a settlement agent on your behalf.

  • Timing for moving out/moving in

So, settlement has been set for the same time on the same day.  Great news – you only have to move once.

Now it is time to co-ordinate moving.  The best option tends to be hiring a removalist with a truck large enough to fit all of your furniture and possessions in, in one go.  This will allow you to pack up and vacate the property easily prior to settlement.

  • Moving into new property including the collection of keys

Once you have moved out of your old home, you will be waiting for the keys to move into your new home.  In order for you to collect the keys , your solicitor or conveyancer will call the agent and let them know settlement has been finalised, this will happen within 30 mins to 1 hour of the set settlement time.  This call will enable the agent to release the keys to you and you will finally be able to move into your new home.

If you're thinking of selling first, have a read of part one here.

If you would like more information on the process of buying and selling please contact Kylie Fuentes our licensed conveyancer in Picton.

To buy or sell first? Part one

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If you are looking to buy a new home and sell your existing home you've most likely wondered whether you should buy or sell first.

There are several things to consider when making this decision so you are best prepared for the journey. In part one here we'll look at things to consider when selling first.

Selling first

Pros

  • You are in a better position to negotiate your sale price
  • You will know what your limit is on purchase price when buying your new home
  • The need for bridging finance is less likely
  • You can plan ahead and extend the settlement period to allow you to secure your new home

Cons

  • In a quickly rising market your new home may be more expensive than you planned for
  • You may need to consider temporary accommodation if you have not secured a new home by settlement on your sale
  • Possibility of storage fees or double the removalists fees
  • If permitted under your contract you may use the deposit paid by the purchaser towards the deposit payable on your new home

Negotiating power

A main benefit in selling your existing home first is that you will know exactly what you can spend on a new home.  This will help you budget your family expenses and make the right move for you and your family.  By selling first, you also put yourself in a better position to negotiation the best sale price as you are not under pressure to achieve settlement on a certain date.

Extended settlement

In this scenario however, a good option is to have a longer settlement period of approximately 10-12 weeks (or longer if you are moving to an area where properties are scarce).  This will allow time for the cooling off period on your sale to come to an end and for you to secure a new home to move into.  This will also reduce the likelihood of needing temporary accommodation and extra moving costs.

Releasing your deposit

Many people looking to move on in the property market may be hesitant due to access to funds for a deposit, especially if your deposit funds are tied up in the equity in your home.  By selling first you can overcome this issue.  Ensure when your Contract is prepared that it allows you to use the deposit being paid by the purchaser prior to settlement.  By having this provision in your Contract you will be able to access these funds for your purchase.

Leaseback

If an extended settlement will not work for your buyers you could raise the option of a leaseback provision.  By doing this you effectively extend your moving out date until you secure a new home.  This is useful if your existing home is one investors are likely to be interested in as they will have a guaranteed tenant from the settlement date.  The details of this kind of provision are usually negotiated at the time of exchange.

Contingency plan – Conditional Sale

A last resort to overcome the cons is to make your sale dependent on you purchasing your new home.  Your conveyancer or solicitor can insert a clause into the Contract that stipulates that settlement is not triggered until you have secured your new home which will allow you to line up settlement allowing you to only have to move once.  Keeping in mind this may reduce the number of buyers interested in your existing home.

Contingency plan - Renting

If the above options do not suit your needs or your purchaser you may need to consider a short term rental until you have secured your new home.  If you do consider this option, when looking at rentals be very clear that it is short term situation and check what the termination costs are if you move out earlier than the lease expiry date.

If you're thinking of buying first keep an eye out for part two where we'll outline further considerations to help you prepare for the journey.

Ready to discuss your next buying or selling property transaction? Talk to the team at Coutts Solicitors & Conveyancers.

What should I tell my Conveyancer?

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A lot of people do not know when exactly they should start talking to a conveyancer. The simple answer is, the earlier, the better. As your conveyancer, the more we know about your buying or selling situation, the better we are able to act on your behalf.

As a purchaser or seller it is important to remember that the smallest amount of information, while it may seem unimportant to you, can have a severe impact on your transaction. As your conveyancer we don't want to come across any surprises so it is extremely important that you communicate to your conveyancer if you have, for example, severe financial restrictions, tight time limits, or any other specific concerns or requirements relating to your situation.

To assist you in your next sale or purchase, we have prepared a short summary listing some of the things you'll need to tell you conveyancer in your first meeting.

Selling

If you are selling, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name since you bought the property (meaning the legal owner on the Certificate of Title will differ from your new name);
  • If you are separating/have recently separated (in these circumstances, instructions will be required from both parties);
  • If you are getting married/have recently married (meaning that your legal name has or will change);
  • If you are re-financing/recently re-financed (this may hold up settlement of your sale – important for us to know right at the start);
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If you pay land tax;
  • If you pay local land services rates;
  • If you anticipate your property will sell for $2,000,000.00 or over;
  • If a party to the Contract has passed away; and
  • If you are also looking at purchasing at the same time (and require a simultaneous settlement).

Buying

If you are buying, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name (we will need to ensure that the name on the Contract is correct);
  • If you are getting married/have recently married (again, we will need to ensure that the name on the Contract is correct);
  • If you have a guarantor to your loan (this is important for settlement/mortgage document purposes);
  • If you are re-financing during your purchase (again, very important for settlement purposes);
  • If you need a 5% deposit to be acceptable by the Vendor;
  • If you need another person on the Contract (such as a parent or sibling) for the purposes of loan approval;
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If this is your first purchase; and
  • If you are relying on the sale of another property to be able to purchase.

Whilst the above is not a conclusive list of what your conveyancer needs to know in your first appointment, it is a start. Before you meet with your conveyancer it is a good idea to have a think about how your situation differs or is special from what you would consider a normal situation, and be prepared to discuss this with your conveyancer.

Ready to discuss your next buying or selling property transaction? Talk to the team at Coutts Solicitors & Conveyancers.