Conveyancing is the process of transferring ownership of Property. Buying Property is a big decision. Take care before you commit to signing a Contract. Conveyancing transactions:
- are complex,
- require precision and prompt action,
- can be difficult and time consuming,
- involve many parties,
- are time critical, and
- need careful co-ordination.
Property dealings usually involve a person’s largest financial transaction. Property transactions are usually part of more major changes in a person’s affairs. Failures in the process are likely to have dramatic consequences. Transactions do not proceed as smoothly if one party is not familiar with the required procedures and has to learn as the transaction proceeds. There are more likely to be mistakes. Acting without proper advice is a dangerous and fearful experience. Talk to Tierney Law.
The standard Tasmanian Contract for Sale of Real Estate form is structured on two separate components:
- a set of variables and non-standard matters agreed between the parties, known as The Particulars of Sale
- the text of the clauses that make up the typical agreement between the parties, known as The Standard Conditions Of Sale.
If there is a real estate agent, the real estate agent:
- usually prepares the Contract
- typically has the Purchaser sign first
- then presents this offer to the Vendor, to accept or reject.
If the offer is rejected, there may be further negotiation.
When the Vendor is content with the offer, the Vendor signs the Contract to accept the offer and makes it binding to both parties. Once a Contract is made the parties are bound to act according to its terms. The Contract should include all substantial matters agreed, for example, any outstanding work the seller agrees to complete. The Contract should specify any important assurances given in negotiations and any preconditions, such as approval of a home loan for instance. The Contract is the last opportunity for negotiation. The Current Standard Contract provides:
- for a default cooling off period, that gives a Purchaser a right to withdraw from the Contract, without penalty, by notice to the Vendor within three full business days of the Contract date.
Read the Contract carefully. Raise with the agent anything you do not understand. If that does not resolve your query, get legal advice. Talk to Tierney Law.
The Contract will provide a date for completion. This is the changeover date to complete the transfer of ownership. Completion is sometimes called settlement. The default provision under the Standard Contract is:
- Land is sold on an “as is where is” basis.
- The Purchaser takes the Property as found.
- The Vendor does not automatically warrant that:
- the Property has all necessary approvals, or
- buildings are built to any particular standard or according to the building regulations.
Inspect the Property carefully before signing the Contract. Consider if you need or if the Vendor will grant the promises in the Contract about the condition of the Property.
Vendors in Tasmania should advise Purchasers about title restrictions on use of the Property, but are not required to disclose to the Purchaser a minimum set of specified information about the Property unless the parties negotiate for the Contract to say so. The Law Society and the Real Estate Institute have prepared a standard list of questions for the Vendor, called a ‘Vendor Property Disclosure Statement’. Tierney Law or your Real Estate Agent can provide you a copy of the standard Vendor Property Disclosure Statement. The standard Vendor Property Disclosure Statement:
- requires the Vendor to state what he knows
- is not compulsory
- is not a guarantee beyond an assurance of an honest statement of what the Vendor knows.
If you need a guarantee beyond the knowledge of the Vendor, have a special clause in the Contract to say so.
Before signing, check the Property can be legally used as you intend, particularly if you intend a non-residential use. Checking the title documents before you sign a Contract. The Real Estate Agent should be able to provide you with an up to date copy, if not contact Tierney Law. Despite our best efforts, your inspections and my due diligence may not detect all problems with the Property.
You can buy insurance against risk from undetected problems with your ownership and use of the Property. The Property is at your risk as the Purchaser from the date the Contract is signed. You should protect yourself against Property damage by insuring the Property from the date the Contract is signed. You should not wait until settlement. People without residency status in Australia may need special Government permission to buy land. Go to www.firb.gov.au or talk to Tierney Law if you do not have permanent Australian residency status.