| Buying : Documentation DOCUMENTATION
The Vendor’s Statement (Section 32) was introduced in 1983. The law precludes a purchaser and seller from entering into a legally binding contract for the transfer of real estate until the seller provides certain information in writing about the property by completing a Vendor Statement. This statement must be signed by the sellers or their legal representative and supplied to the purchaser for their signature before a contract/contract note is signed. A copy of the Certificate of Title (or proof of the seller’s right to sell), must be attached to the statement. Other information contained on the statement may include any restrictions on the property such as easements and covenants, rates and other outgoings, zoning information and any notices, orders or approved proposals affecting the land. If the vendor’s statement is proven to contain false or misleading information, you the purchaser may be able to rescind the contract at any time before accepting Title or becoming entitled to possession.
The title is a critical issue and you are wise to ensure that the physical boundaries of the property are the same as shown on the Title. Legally you are entitled to measure and check that the boundaries are correct. Measure not only the property boundaries but the distance between an identifiable street corner point and the boundary of the property. If you have any doubts after measuring the property yourself, consult the selling agent or your legal representative and advise them of the discrepancy. It would be wise to engage a licensed surveyor to ascertain the actual property boundaries.
The dictionary defines a Covenant "as a rule, an agreement or a promise, creating an obligation". Some examples include:
The most common easements are for the flow of water, storm water and effluent. Others are rights of way and aerial easements (ie. power authority overhead transmission lines). Most easements are registered on the Title, however there may be occasions where an easement (known as an unregistered easement) is not shown on the Title. Legal advice should always be sought before purchasing to clarify the situation. To build over an easement eg. a garage, written permission must be obtained from the relevant authority for example, the council, and even then certain conditions may apply.
The term caveat basically means WARNING. By lodging a caveat on the Title, a person's interest in the property is protected.
Some other certificates or information may include:
These items represent most of the major potential issues. However, as stated earlier all items need to be checked by a qualified legal adviser. See Resources for access to a wide array of Government Departments
Joint Proprietors, (also known as Joint Tenants) is a very common property ownership arrangement. Each person has an equal share of the property and in the event of the death of either party `the rule of survivorship’ applies. In other words the survivor automatically becomes the sole proprietor or sole owner. Proprietors in common (also known as Tenants in Common) is an alternative form of co-ownership. The share in the property may be equal or unequal ie. one person may have 10% another 30% and so forth. In this form of ownership, each person deals separately with their share of the property. They may Will or sell their share to whomever they choose as the rule of survivorship in this instance. Very importantly, all persons are liable for any debt secured over the property and legal and financial advice must be sought before entering into a proprietorship of this nature.
In Victoria a contract of the sale of land must be in writing and signed by all the parties to the contract. This is established in section 126 of the Instruments Act 1958. Thus, whereas other contracts may be verbal, a contract for the sale of land must be in writing and a vendor statement must be attached.
An estate agent would use the contract of sale if the sale of the property was by auction. The contract of sale is prepared by the seller’s legal advisor and supplied to the agent before the auction. You are well advised to check all the terms (eg deposit, settlement date) with your legal advisor and conditions of the contract of sale to ensure it meets your needs.
Normally 10% of the purchase price.
When purchasing property you may need to have a special condition of sale for example "finance" or perhaps a "conditional upon a building inspection". A selection of some of the standard conditions used are included. Once again legal advice is recommended for each individual prior to signing any legally binding document.
What does the term "Cooling Off" mean? The "cooling off" period was introduced in 1983 to enable purchasers of particular types of property to withdraw from a contract in certain circumstances. The cooling off period applies to residential and rural properties not exceeding 20 hectares. It does not apply if the property is purchased on the day of auction, or three clear business days either before or after the auction date or to property primarily used for industrial or commercial purposes. An estate agent, a proprietary company or a purchaser who receives independent advice from a solicitor prior to signing the contract/contract note is not entitled to the cooling off period. If you wish to exercise your right to withdraw from a contract, you must do so in writing to the seller, their agent or legal representative, within three clear business days from the time the purchaser signs the contract/contract note. Saturdays, Sundays and gazetted public holidays throughout Victoria are not included and neither is the day on which the purchaser actually signs the contract/contract note. The Seller is entitled to retain $100 or 0.2% of the purchase price, whichever is greater. The balance of deposit that has been paid is then refundable to the purchaser.
Settlement of a property indicates that the balance of the purchase price has been paid by the purchaser "usually by bank cheque" to the seller and in exchange the seller passes over the physical possession of the property and the title to the purchaser. However, in the event that the property is subject to an existing lease, the purchaser would not take physical possession of the property (eg. be allowed to move in) but would be entitled to the rent paid by the tenant from the day of settlement. The actual settlement date is set out in the contract of sale/contract note although the date may be altered provided both parties are in written agreement. Your Legal representative, will attend to settlement on your behalf. Upon settlement you the purchaser are entitled to obtain the keys for the property. Normally, the selling agent holds the keys and they may be obtained immediately after they have been advised that settlement has occurred.
The terms are usually 10% deposit and the balance of money payable at a specified mutually agreeable time.
See Resources for access to a wide array of information.
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