For our conveyancing clients as referred to in our letter. Important Information.
RESIDENTIAL CONVEYANCING
BOOKLET
(FOR BUYERS)
1. INTRODUCTION
1.1
This Residential Conveyancing Booklet (“the Booklet”) is to be read in conjunction with the
letter to which this Booklet is attached (“the First
Letter”).
1.2
The First Letter contains information which is specific to your transaction, such as:-
(a) contract information;
(b) critical dates;
(c) what you need to do now;
(d) information on identity, searches and PAMDA compliance;
(e) details of legal fees, transfer duty and outlays; and
(f) a checklist of matters you need to attend to.
1.3 This Residential Conveyancing Booklet contains information on the following:-
(a) what is included and excluded from our retainer;
(b) an explanation of the contract terms;
(c) risk and insurance;
(d) how PAMDA affects you;
(e) important contractual matters to consider;
(f) additional matters if your purchase involves a residential
tenancy; and
(g)
additional matters if purchasing a unit.
1.4
If you have any queries or questions about the information provided to you, please call us.
2.
OUR RETAINER
2.1 What is included in our retainer?
Our
retainer to act in a conveyance includes all matters which the Queensland Conveyancing
Protocol (endorsed by the Queensland Law Society) recommends as being usual
and
necessary
for the purchase in Queensland of houses and residential land or residential lots in a
community titles scheme.
If you instruct us to exclude any of the steps that are generally considered usual and necessary
in a conveyance we are required by law to provide you with
a detailed explanation of the risks
associated with these exclusions. Advice of this nature is not part of the usual conveyancing
process and will be an extra cost to you.
2.2 What is excluded from our retainer?
Our
retainer does not extend to matters which go beyond what is usual and necessary in the
conveyancing process. We consider the following items to be excluded:-
(a) No financial/tax/matrimonial advice
Advice regarding the commercial viability of the transaction or the tax,
succession,
matrimonial
or other financial implications of the purchase. If you require advice on the
commercial viability or the tax implications of the purchase you should
seek the advice
of
a specialist financial adviser or tax professional such as your accountant.
(b) No physical inspection
We do not carry out a physical inspection of the property. It is up to you to do this.
Issues relating to the location of the property, impact
of adjoining properties, impact of
proposed development, or proposed road works on land in the vicinity of the property
that does not actually adjoin the land will not be discovered
by us in our searches.
Therefore it is imperative that you advise us immediately of any concerns you have
following your physical inspection of the property.
(c) Finance
It is up to you to apply for finance (if required) and tell us whether your finance approval
is satisfactory. A finance approval is often subject to
satisfactory valuation or other
conditions. If so, it is up to you to arrange for the valuation and decide whether you are
able to satisfy any condition of the finance approval before
notifying us that you have
finance approval.
We
will as part of the conveyance, need to liaise with your financier to arrange
settlement, however, any instructions you give us concerning your loan,
the security
documents
or any certificates required by your financier are beyond the scope of this
retainer.
(d) Building and Pest
It
is up to you to obtain any building and pest inspection reports and tell us whether it is
satisfactory to you. We confirm that our retainer does not extend to giving
advice
regarding
the building and pest inspection report.
(e)
Sustainability Declaration
It
is up to you to satisfy yourself as to the accuracy of any Sustainability Declaration
required to be given to you (see paragraph headed “Sustainability
Declaration”).
(f)
Limited town planning information
The
information available from town planning searches is set out in section 7.4 of this
Booklet and Tables 1 and 2 of the First Letter. The available information
depends on
the
search you select. The work to be done as part of this retainer does not include
advice about any of the following issues unless you specifically instruct
us to do so:-
(i) Site Issues
The
development potential of the site, whether nearby land is subject to
development applications or development approvals which could affect the
value or potential development of the site, whether any
applications over the
site are current or have lapsed, whether the site and structures on the site
have all necessary approvals, whether any approvals over
the site have
lapsed,
whether any old or historic approvals are still current and binding on
the site. For example, without limiting the above, whether a Bushfire
Management Plan affects the property. If you are concerned
about the impact
of
any such plan on your use of the property (and whether one exists) then
you should make your own enquiries with the relevant local council.
(ii) Planning Laws
The
laws about compensation for changes in the town planning scheme,
deadlines to apply under superseded versions of the town planning scheme
or
other
deadlines to make and pursue applications for approvals, whether the
seller should assign certain rights to make applications to the buyer,
any
existing
use rights, infrastructure charges which apply on development,
whether the site is subject to call in powers by the government, any existing or
proposed planning scheme amendments, the effect of the
South East
Queensland
Regional Plan, the effect of current and future government
planning policies.
(iii) Other Laws
Local laws including local laws concerning the protection of vegetation,
noise
including
industrial noise, road noise, rail noise, aircraft noise and future
planned increases in noise levels from these and other sources, current
and
future
transport routes, vegetation controls, whether the site has been illegally
cleared in the past.
(g) Limitation on actions that can be taken under the contract as a result of search
information
The searches which we recommend are essential for a buyer to conduct in the
conveyancing process, however the actions you can take
as a consequence of the
information produced by the searches depends on the contract. The standard REIQ
contract which has been approved by the QLS is written
to have regard to the rights of
the buyer and seller with rights to terminate for matters which are not considered
fundamental to the contract being limited. As a consequence not all adverse search
results will give you a right to terminate or a claim for
compensation.
(h) Survey
We do not conduct a survey – this is your responsibility. Issues such as
encroachments will not be identified unless a survey is
conducted.
(i) Document Retention
It is important for you to retain copies, and originals (where appropriate) of all
correspondence and documentation relating to your purchase
as this may be required
for taxation, duties or other evidentiary purposes at a later date. For example, if the
property is held as an investment at any time, then your
purchase documentation may
be relevant for Capital Gains Tax purposes.
(j) Consumer Guarantees
In
some circumstances where goods are being supplied as part of the sale of the
property, the consumer guarantees contained in the Australian Consumer
Law may
apply
in relation to those goods. In such cases, you may have rights pursuant to
implied consumer guarantees following settlement. Where these guarantees
apply
they
cannot be contracted out of, however, our retainer does not extend to providing
advice in relation to the applicability or effect of the consumer guarantees
in relation to
your
purchase.
(k) National Rental Affordability Scheme (NRAS) lease or arrangement
Unless we have specifically agreed in writing with you, we will not be
providing advice
on
any NRAS lease or arrangement that may be related to your purchase and it will be
beyond the scope of work and advice we will be providing. NRAS arrangements
are
very
complex in nature and may require specialist legal advice from within our firm or
from another firm. It is your responsibility to ensure you are receiving
NRAS advice for
this
transaction and if you choose not to you may not be eligible for any benefits from
the NRAS scheme, the NRAS lease or arrangement may not be enforceable or
you
may
suffer loss.
3. EXPLANATION OF THE CONTRACT TERMS
3.1 Form of contract
There are two forms of contract recommended by the Real Estate Institute
of Queensland and
the
Queensland Law Society. They are:-
(a)
Houses and Residential Land (9th Edition); and
(b) Residential Lots in a Community Titles Scheme (5th Edition).
You should read your contract in detail, in particular the reference schedule.
In this section we point out contract terms which we consider important
in relation to your
purchase.
3.2 Reference Schedule
The reference schedule contains the particulars which are relevant to your
contract. These
particulars
are set out in the First Letter. You need to check that they are accurate and tell us
immediately if the particulars are not accurate.
3.3 Time essential
Time is of the essence of the contract. This is a legal
terms that means that you must perform
all your obligations under the contract strictly by 5pm (or other specified time) on the specified
due date. For example, you must be ready willing and able
to settle on the Settlement Date,
otherwise the seller may either terminate or affirm the contract. In both cases, the seller would
also be able to claim damages from you.
In certain limited circumstances where either party is unable to meet their
settlement obligations
because of a natural disaster (for example the January 2011 South-East Queensland floods)
time will no longer be of the essence.
When the natural disaster no longer prevents that party from performing
their settlement
obligations:
(a) that party is obliged to serve a notice advising that they are no longer
affected; and
(b)
either party may serve a notice to settle which must state that the suspension has
ended, nominate a new settlement date (which must be not less than 5 but
not more
than
10 Business Days after the date of the notice) and that time is of the essence.
The suspension of time has then ended and both parties are obliged to settle on the date stated
in the notice to settle.
3.4 Deposit
Payment of the deposit is a sign of your intention to proceed with the
contract. It is usually a
substantial amount but no more than 10%. If the contract becomes unconditional and you later
default under the contract then the seller may be entitled
to forfeit the deposit and sue you for
damages. The deposit holder (who generally must be a solicitor or real estate agent) holds the
deposit in trust until completion when the deposit will
be paid to the seller (usually less the
agent’s commission). It is therefore important that the deposit holder be either a solicitor or real
estate agent and that the deposit is held in a trust account.
If the deposit is given directly to the
seller and not held in trust by an agent or lawyer then there is a risk that the seller may go
bankrupt or into receivership and that you will not recover
all of your deposit.
If
you were to terminate for valid reasons in accordance with the contract, then the deposit
would be repayable to you. If the deposit is not paid on time or you are
otherwise in
fundamental
breach of the contract the seller will be able to terminate the contract and forfeit the
deposit. The seller may also recover as a liquidated debt, any part of
the deposit which is not
paid when required. If the seller is obliged to pay GST then GST will be payable on the forfeited
deposit. The seller may also be entitled to damages.
3.5 Finance
If the contract is subject to finance, you must take all reasonable steps
to obtain finance
approval
by the finance date. This would include making a finance application shortly after the
contract date and pursuing the application diligently. If you have a letter
of approval from a
financier
you should send it to us. We can answer questions about the finance approval,
however, the responsibility to obtain finance approval and decisions relating to the acceptability
or otherwise of conditions in the finance approval rests
with you.
We must notify the seller as to whether or not you have
finance approval on or before 5:00pm
on the finance date.
You
need to give us instructions on the satisfaction or otherwise of the finance condition in
sufficient time prior to the deadline for notification to enable us to
prepare and give the requisite
notice under the contract.
We suggest you plan to give us instructions on the day before the finance date, however, if this
is not possible by 12 noon on the finance date.
If you do not have written finance approval from your financier, we can
(on your behalf) by
notice,
terminate the contract (and the deposit will be returned to you) or seek an extension of
time for finance. Agreement from the seller is required to any extension
and there is a risk that
your request may be declined.
Alternatively, you may instruct us to waive the benefit of the finance condition, however, waiving
the benefit of the finance condition means you are bound
to complete the contract regardless of
whether your financier approves finance or the finance terms are satisfactory.
If we do not notify the seller that finance is approved or that the finance
condition is waived by
the finance date then the contract remains on foot and both you and the seller have a right to
terminate the contract. You also have a continuing right
to give notice that satisfactory finance
has been received or alternatively waive the benefit of the finance condition up until the time
the
contract
is terminated by the seller.
If
you decide to waive the benefit of the finance condition you must instruct us to give notice to
the seller, as your waiver will not be effective unless
notice of waiver is received by the seller
prior to the seller notifying us of the termination of the contract.
3.6 Building and Pest Inspections
If the contract is subject to satisfactory building and
pest inspection reports you must take all
reasonable steps to obtain the reports. You must use a licensed building inspector otherwise
you will not be able to terminate the contract on the grounds
that you are not satisfied with the
building and pest inspection. You should provide us with a copy of the building and pest
reports.
We must give written notice to the seller’s solicitors on or before 5:00pm on the inspection
date
as
to whether or not you are satisfied with your building and pest reports.
You need to notify us of your satisfaction or otherwise with the building and pest reports in
sufficient time to enable us to prepare and give the requisite
notice under the contract.
We
suggest you plan to give us instructions on the day before the inspection date, however, if
this is not possible, by 12 noon on the inspection date.
If you do not have a report by the inspection date you can instruct us
to seek an extension,
however, the seller is not obliged to grant the extension.
If you are satisfied with the report, you should instruct us to give notice to the seller that
the
building
and pest condition is satisfied.
If,
acting reasonably, you are not satisfied with the results of the building and pest reports then
you may instruct us to terminate the contract. Your other
option is to waive the benefit of the
condition in which case the contract will no longer be subject to this condition and you will be
obliged to proceed with the contract. In either of these
cases, you do not have any recourse
against the seller under this condition for issues which are raised in the building and pest
reports.
If you do not instruct us to give a notice to the seller before 5:00pm on the inspection date,
the
contract
remains on foot and both you and the seller have a right to terminate the contract. You
can also before the seller gives a notice terminating the contract, give
notice that you have
received a satisfactory report or alternatively elect to waive the benefit of the building and pest
condition.
If you decide to waive the benefit of the building and pest condition you must instruct us to give
notice to the seller, as your waiver will not be effective
unless notice of waiver is received by the
seller prior to the seller notifying us of the termination of the contract.
Note, there are no other rights to terminate for unapproved structures
in the contract, unless a
show cause or enforcement order exists.
3.7 Cheques for settlement
The contract only obliges you to pay for bank cheques in favour of the
seller and the seller’s
financier at settlement. If the seller requires additional bank cheques the seller must pay the
cost of those cheques at settlement, unless you agree in
writing prior to settlement to draw trust
cheques for those amounts.
3.8 Settlement Funds
If the amount of your loan does not cover all of the funds required for settlement you are
responsible for providing the balance amount as cleared
funds. You can either:-
(a)
make arrangements for the funds to be provided to your bank, and instruct your bank to
attend at settlement with the balance of the settlement money;
(b) provide the funds to us as a bank cheque payable as
instructed by the seller. You will
need to ask us about the cheque details; or
(c) deposit to our trust account as cleared funds at least one day prior to the day
of
settlement.
Note that an ordinary bank transfer is not cleared funds and we cannot
draw on those funds. The amount needs to be deposited in cleared funds
by:-
(i)
telegraphic transfer; or
(ii) RTGS.
If you need to do this please contact us and we will provide our trust
account details to
you.
4. INSURANCE
4.1 Risk
The property will be at your risk from 5:00pm on the first business day after the Contract Date.
Despite this, the seller has a continuing obligation until settlement to take reasonable
care of the
property.
4.2 If the lot you are purchasing is a residential house, not in a Community
Title Scheme
Because the property is at your risk, we recommend if you have not already done so, that you
arrange property insurance cover in respect of the house,
contents and public liability.
You
can arrange insurance by contacting an insurance broker or home insurance company
directly.
4.3 If the lot you are purchasing is a lot in a Community Titles Scheme with common walls
The
body corporate is responsible for insuring the building for replacement value and public
liability in respect of the common property and any relevant body corporate
assets. We will
obtain
insurance information as part of our searches and you will need to satisfy yourself the
insurance is adequate.
We recommend that you arrange insurance cover in respect of the contents of the unit (which
will include things such as carpets, curtains and internal
blinds) and public liability insurance for
the interior of the lot.
4.4 If the lot you are purchasing is a lot in a Community Titles Scheme with no common
walls
The body corporate is responsible for public liability
insurance in respect of the common
property and any relevant body corporate assets. The body corporate may insure the building
with the agreement of all lot owners.
We recommend that you arrange insurance cover in respect of the building
(perhaps by way of
a
cover note), the contents of the unit (which will include things such as carpets, curtains and
internal blinds) and public liability insurance for the
interior of the lot.
The
building insurance should cover you until you are able to discover by search whether the
body corporate has common insurance for the building.
If the body corporate has not insured the building then your insurance
of the building will be
relevant, and you should pay the applicable premium, but if you are satisfied with the body
corporate insurance you can cancel your building insurance,
but must still maintain insurance of
the contents and public liability within the unit.
4.5 If obtaining finance
If you are obtaining finance it will be necessary for the bank to be noted
on the policy as first
mortgagee. You should arrange for your insurance broker or home insurance company to
attend to this for you.
5. HOW DOES THE PROPERTY AGENTS AND MOTOR DEALERS ACT 2000 (“PAMDA”)
AFFECT YOU?
5.1 Warning Statement
PAMDA requires that all contracts for the sale of residential property
in Queensland have
attached
a PAMD Form 30c Warning Statement (“Warning Statement”).
The only exceptions are where:
(a) the property is sold under the fall of the hammer by outcry at auction, however if the
property is passed in a Warning Statement must be attached
to the contract; or
(b)
a buyer drafts and submits a signed contract to a seller as an offer to buy.
You should read the Warning Statement carefully as it contains important consumer protection
information regarding a cooling off period and recommends
that you obtain an independent
valuation of the property.
Be aware that by signing the Warning Statement you acknowledge:-
(a) you have read all sections of the Warning Statement;
(b) your attention has been directed to the Warning Statement and the contract
attached
to
the Warning Statement;
(c) you signed the Warning Statement before you signed the contract; and
(d) signing the Warning Statement negates any termination right you may
have had under
s.370
of PAMDA.
5.2 Information Sheet
The Body Corporate and Community Management Act 1997 (“BCCMA”)
requires that all
contracts
in relation to lots in a community titles scheme have attached a BCCM Form 14
(“Information Sheet”). As with the Warning Statement, an Information
Sheet is not required to
be attached if the property is sold at auction.
You should read the Information Sheet carefully as it contains important information about
community titles schemes and the obligations of the body
corporate and individual lot owners.
Be
aware that by signing the Information Sheet you acknowledge:-
(a) you have read all sections of the Information Sheet;
(b) you have signed the Information Sheet before you signed the contract
to which it is
attached;
(c) your attention has been directed to the Information
Sheet and the contract; and
(d) signing the Information Sheet negates any termination rights you may have had under
Sections 206A or 213A of BCCMA.
5.3 Cooling Off Period
Under PAMDA, unless you waive the cooling off period, you are entitled
to a five (5) business
day cooling off period. This period starts on the day that you or your appointed agent (which is
usually us as your appointed solicitors) receive the relevant
contract, signed by the seller, in
accordance with the requirements of PAMDA or if the seller signed the contract before you did
then on the day that you signed the contract and communicated
acceptance to the seller. The
cooling off period ends at 5:00pm on the fifth business day.
You are entitled to terminate the contract during the cooling off period. If you terminate the
contract in the cooling off period, the seller is entitled
to retain a termination penalty of 0.25% of
the purchase price from the deposit up to a maximum of the full deposit amount. The balance
deposit must be refunded to you within fourteen (14) days
following termination.
If
you decide to terminate the contract during the cooling off period you should tell us
immediately so that we have sufficient time to give the requisite notice
before the cooling off
period ends.
5.4
Valuation
The Warning Statement recommends that you obtain an independent valuation of the property.
We endorse this recommendation and suggest valuation advice
be obtained from an
independent
Queensland Valuer. We do not provide valuation advice and the price is
something in respect of which you need to satisfy yourself. The contract
is not conditional upon
a valuation being obtained and therefore, if you do not want to proceed until you have a
valuation, you will have to obtain the valuation prior
to entering the contract or at the very least
prior to expiration of the cooling off period.
The contract provides that the seller must allow you access to the property (after reasonable
notice) once prior to settlement for the purpose of valuing
the property.
5.5 Vacant land – Non residential use - Pre-contract
notice
If you are purchasing vacant land through an agent or auctioneer and at the date of the contract
the land is not able to be lawfully used for residential
purposes the seller’s agent or auctioneer
should have delivered a notice under section 149/226 of PAMDA to you stating, amongst other
things, that the land is not able to be lawfully used for
residential purposes.
The
limited town planning certificate should tell you if the land cannot be used lawfully for
residential purposes.
If:-
(a)
you are purchasing vacant land;
(b) the limited town planning certificate reveals that the land cannot be used for residential
purposes; and
(c) you did not get a notice from the agent or auctioneer under s.149/s.226
of PAMDA that
the
land cannot be used for residential purposes or the notice was materially defective,
you need to tell us immediately, as you may have a right under s.150/s.227 of PAMDA to avoid
the contract by giving a notice of avoidance within six
(6) months of the contract date.
If
you avoid the contract, the seller and the seller’s agent will be liable to pay to you all amounts
paid by you under the contract and amounts paid for legal
and other expenses after the contract
was signed. You could also require that the property be reconveyed to the seller following
settlement and that the seller pay the associated costs.
If this notice has been received please forward a copy to us to check.
If the notice has not been given and the contract has not yet been issued
please have us check
any notice prior to signing the contract.
6. POOL SAFETY
6.1
What is a “swimming pool”
A regulated swimming pool is any excavation or structure capable of being filled with water to
a
depth of 300mm or
more including a pool, spa pool/tub or wading pool, but generally does not
include a fish pond (or similar ornamental water feature), dam, water tank,
watercourse, spa
bath
in a bathroom (unless continually filled with 300mm or more of water) or birthing pool.
If you have any doubt as to whether a pool is situated on the property, then you should contact
us.
6.2 Non-shared pool – obligation to obtain Pool Safety Certificate
Where
there is a pool on the property (or on adjacent land used in association with the property)
that is a non-shared pool and there is no Pool Safety Compliance
or Exemption Certificate in
effect, the seller must not enter into a contract to sell the property without giving you a Form 36
Notice of No Pool Safety Certificate.
If you complete the purchase without obtaining a current Pool Safety Compliance
or Exemption
Certificate
at settlement you become responsible for obtaining a Pool Safety Certificate within
ninety (90) days of settlement and are also responsible at your cost to
carry out all works
required
(e.g. upgrading the pool fence) to meet the pool safety standards currently in force.
We do not remind you of this date and suggest you make a note of the date by which you must
obtain a Pool Safety Certificate.
6.3 Non-Shared Pool – How the contract operates
The
contract requires the seller to complete the following questions:-
Q1 - is there a pool on the property or on adjacent land used in association with the
property?
Q2 - will a Pool Safety Compliance or Exemption Certificate (which includes a Pool Safety
Certificate, a building certificate that may be used instead
of a Pool Safety Certificate or
an exemption from compliance) be given to the buyer at settlement?
Q3 - has a Notice of No Pool Safety Certificate been given?
If the seller has indicated that it will give a Pool Safety Compliance or Exemption Certificate
to
you
then the seller, if it has not already, must hand over a copy of the current Pool Safety
Certificate, building certificate or exemption from compliance at or prior
to settlement, failing
which you can terminate the contract. If any of the certificates provided to you expire before
settlement, the seller must obtain a new certificate which
is in effect at settlement.
If
the seller indicates that it has given a Notice of No Pool Safety Certificate or does not
complete the questions the contract is conditional upon you obtaining from
a licensed pool
safety
inspector:-
(a) confirmation that the pool safety requirements have
been met and the issue of a Pool
Safety Certificate; or
(b) confirmation of the works required before a Pool Safety Certificate can be issued.
You must on or before the Pool Safety Inspection Date notify the seller that:-
(a) a pool safety inspector has issued a Pool Safety Certificate in which
case neither party
has
further rights; or
(b)
if a Pool Safety Certificate is not issued, that you terminate the contract. You must act
reasonably in making this decision; or
(c) you elect to waive the benefit of the condition and proceed to settlement,
in which case
you
become responsible at your expense for obtaining the Pool Safety Certificate
within 90 days of settlement. Please note that it will be up to you to
diarise this 90 day
time
limit as we do not offer a reminder service. Complying with this timeframe is your
responsibility.
You need to notify us in sufficient time to enable us to prepare and give the requisite notice
under the contract.
We suggest you plan to give us instructions on the day before the Pool Safety Inspection Date,
however, if this is not possible, by 12 noon on the Pool
Safety Inspection Date.
Your
other option is to waive the benefit of the condition in which case you must proceed to
complete the contract.
If you do not instruct us to give a notice to the seller before 5:00pm on the Pool Safety
Inspection Date, the contract remains on foot and both
you and the seller have a right to
terminate the contract until settlement or a Pool Safety Certificate issues. You also have the
right to waive the benefit of the condition, before the
seller gives a notice terminating the
contract.
If
you decide to waive the benefit of the condition you must instruct us to give notice to the
seller, as your waiver will not be effective unless notice
of waiver is received by the seller prior
to the seller notifying us of the termination of the contract.
6.4 Shared Pool - (e.g. a pool on the scheme land of an apartment building)
In
the case of a shared pool the body corporate is responsible for obtaining the Pool Safety
Certificate. The seller has an obligation, prior to settlement, where a
Pool Safety Certificate is
not in effect, to give a Notice of No Pool Safety Certificate to:-
(a) you as the buyer;
(b) the body corporate (being the owner of the shared pool); and
(c) the chief executive of the Department of Local Government
and Planning.
The owner of the shared pool (usually the body corporate)
then has ninety (90) days in which to
obtain a Pool Safety Certificate, subject to the transitional arrangements which:-
(a) in the case of a shared pool used for short term accommodation, extends
the time to 1
June
2011; and
(b)
in the case of any other shared pool, extends the time to 1 December 2012.
The consequences for you are that the body corporate must obtain a Pool Safety Certificate at
the cost of the body corporate and may be liable for a
financial penalty for not already having
obtained
the certificate. You may be called upon to contribute your proportionate share of the
cost to obtain the pool safety certificate and any penalties imposed on
the body corporate,
through
body corporate levies.
6.5
Prohibition on letting
If you proceed to settlement without a Pool Safety Certificate for a pool on your property you
are
prohibited
from entering into a lease or tenancy without first obtaining a Pool Safety Certificate.
This prohibition on leasing premises with a non-shared pool prior to obtaining a pool safety
certificate applies to new leases or tenancies entered
into on or after 1 December 2010, subject
to some exceptions and extensions in particular circumstances.
6.6 Penalties
There are substantial financial penalties for non-compliance.
6.7 Pool Safety Register
Owners of swimming pools are responsible for ensuring that
their pool is recorded in the Pool
Safety Register. Failure to do so can result in a $2,000 fine.
7. IMPORTANT CONTRACTUAL MATTERS FOR YOU TO CONSIDER
7.1 Purchasing Entity/Tenancy
If any of the following apply:-
(a) you are purchasing the property as trustee, then we need to establish that the trust
deed authorises acquisition of the property and that the
trustee named in the trust deed
corresponds to the buyer named in the contract. Please therefore immediately forward
the original trust deed to us for this purpose.
(b) there is more than one buyer, then please advise whether
you intend to purchase the
property as joint tenants or tenants in common (and, if so, in what proportions) as we
will need to specify this on the transfer documents. The
effect of joint tenancy
ownership is that the entire title to the land will, on the death of one owner, pass to the
survivors despite any provision in a will. If you purchase
as tenants in common then on
the death of a co-owner the share in the property of that co-owner will pass in
accordance with the will of that co-owner or in accordance
with the laws of intestacy if
the co-owner does not have a valid will.
(c) you are purchasing the property for investment purposes and the contract has not
yet
been
entered into, then we recommend, if you have not already done so, that you seek
advice from an accountant as to the most beneficial purchasing entity taking
into
account
your financial circumstances. If you decide to purchase the property through
another entity then please contact us immediately with the purchasing entity
details.
7.2 Date of Birth
Please tell us the date of birth of each owner. We must
provide this information to the Office of
State Revenue for land tax purposes.
7.3 Foreign ownership
If you are a foreign person or are a trustee of a foreign trust:
(a) you may need to obtain the consent of the Foreign Investment Review
Board under the
Foreign
Acquisition and Takeovers Act 1975; and
(b) you may need to notify the Department of Environment and Resource Management
under the Foreign Ownership of Land Register Act 1988.
Please telephone us if you think this applies to you.
7.4 Present Use
If the present use is not lawful under the relevant town
planning scheme as at the contract date
and this has not been disclosed in the contract then you may be able to terminate the contract
up until 2 business days before the settlement date.
It is not possible to ascertain whether the present use is lawful by search
alone. The only way
of
ascertaining this is by physical inspection and a detailed check against the town planning
codes which apply. This type of investigation will usually
be carried out by a town planner.
Issues relating to present use and related town planning matters which are not dealt with as part
of our retainer are set out in Section 2 of this Booklet.
There are three types of planning and development certificates which can
be obtained from the
local authority to assist in the investigation. The information these searches disclose and their
relative cost (using Brisbane City Council fees as a guide)
are set out below:-
(a) Limited Certificate - $111 (takes 12 business days)
A limited planning and development certificate provides:-
(i) information as to the town plan area or zone in which the property
is located;
and
(ii) by reference to the plan, a description of the planning
scheme provisions
applying
to the property.
Limited certificates do not tell you whether the existing use is lawful or whether any
conditions for the use of the property have been complied
with. This certificate reveals
the designated zone of the land and any other restrictions on the use of land in the
zone. For example, if the property is in a Demolition Control
Precinct or subject to
character housing or other development codes of general application to the area.
(b) Standard Certificate - $487 (takes 12 business days)
A standard planning and development certificate provides:-
(i) the same information as in a limited certificate; and
(ii) a copy of every decision notice or negotiated decision
notice for a
development
approval that has not lapsed, which has been issued by the local
authority in respect of the property.
By
looking at the existing use of the property, the local authority area or zone for the
property and the approvals that have been obtained for the property it
is possible to
ascertain if the property is capable of being lawfully used for its existing
use or for other
uses.
The certificate does not identify whether the conditions of any approval
have been
complied
with.
(c) Full Certificate - $2,650 (takes 30 business days)
A full planning and development certificate provides:-
(i) the same information in a limited certificate and standard certificate;
and
(ii)
if there is currently in force for the property a development approval containing
conditions (including conditions about the carrying out of works or the
payment
of
money), a statement about the fulfilment or non-fulfilment of each condition.
The
full certificate is more expensive because a town planning officer from the local
authority needs to inspect the property and go through conditions of approval
to identify
those
which have been complied with and those which have not.
(d) Recommendation on Town Planning Certificates
Our recommendations on the type of certificate to obtain are:-
(i) for a residential dwelling or vacant land, a limited certificate will generally
be adequate unless you are intending to redevelop the property
when you
may
require a standard certificate. Unless you instruct us that you intend to
redevelop the property we recommend you instruct us to order a limited
certificate;
(ii) for residential units, the overall development must have been granted
an
approval
for a material change of use. It is prudent to obtain a standard
certificate to confirm whether a material change of use approval was obtained.
We recommend you instruct us to obtain a standard certificate.
If you do not
obtain
a standard certificate your risk is that you may not be able to establish
that the use is lawful. In that case, we recommend, at the least, that
you
instruct
us to obtain a limited certificate.
We also recommend you instruct us to order a building search for a certificate
of classification. The issue of a certificate of classification
usually
demonstrates
that the local authority is of the view that the conditions of
development approval have been satisfied. You must check the building
classification of the unit to ensure that the certificate
of classification is of a
classification which allows you to use the premises for your intended use.
The only sure way of knowing whether the conditions of the approval have
been complied with is to obtain a full certificate. However,
obtaining a full
certificate
is costly and takes considerable time to obtain (you may not receive
the certificate by settlement even if ordered immediately). If you require
a full
certificate
please contact us immediately.
7.5
Future Use
If you have any plans to change the present use of the property or any building structures on it
in the future, it is your responsibility to investigate
what approvals you require from the local or
other authorities. This is not part of our retainer.
7.6 Environmental Protection
In addition to the disclosures required under the contract, the Environmental
Protection Act
1994(“EPA”)
requires that the seller disclose in the contract any of the following, if applicable:-
(a) if the land is the subject of a notice issued under the EPA informing the seller that the
Environmental Protection Authority believes the land has
been or is used for a
notifiable activity or is contaminated, a notice to conduct or commission a site
investigation, a remediation notice or a notice that the
Environmental Protection
Authority requires a site management plan to be prepared for the land; or
(b) if a magistrate issues an order under the EPA for an authorised person
to enter the
land
to conduct an investigation or to conduct work.
If any of these situations arise and they are not disclosed in a notification by the seller under the
EPA prior to you entering into the contract then you may
terminate the contract by notice given
before the earlier of completion or possession. In this event, all money paid by you must be
refunded by the seller.
The searches we undertake only identify land which is on the Contaminated
Land Register or
the
Environmental Management Register but not land which is the subject of the notices
referred to above. If you have any suspicions that the land may be contaminated
or that any of
these
matters may affect the land, please contact us immediately so that we can take the steps
necessary to address the issue.
7.7 Administrative Advices
Administrative advices may also reveal other interests impacting on the
land that require
disclosure
by the seller such as heritage listing or agreements, coastal protection notices,
nature conservation orders, vegetation clearing offences, Milton Brewery
notices (in respect of a
unit) or water licences.
In
addition an administrative advice is lodged on the title where land is declared acquisition land
under the Queensland Reconstruction Authority Act 2011
(QLD) and the following applies:-
(a)
the registered owner is not able to sell the land other than to the relevant authority;
(b) if the owner does want to sell the land the relevant authority must
acquire it.
Your rights in relation to any administrative advice depend
on the content of the notification
which gives rise to the administrative advice and the extent of disclosure in the contract or
otherwise.
7.8 Land valuation and taxes
An administrative advice called a Land Valuation Act Notice may be recorded
on the title of the
property
you are buying. This notice alerts potential buyers that a deduction for site
improvement or an offset allowance applies to the land.
However, on the change of ownership, any existing deduction for site improvement or
offset
allowance
will no longer apply to the land.
Therefore,
as a buyer, the calculation of local government rates, state land rent and/or land tax
will be based on the unimproved value (without any deduction for site improvements
or offsets).
A property details report, available by searching the Queensland
Valuation And Sales (QVAS)
database at any of the DERM business centres, specifically states the amounts of the site
improvement deduction total and the unadjusted value.
Depending on your proposed use of the land or your status you may be entitled
to deductions or
concessions
in relation to the assessment of rates or land tax that apply to the property, for
example:-
(a) a concession under the Land Tax Act 2010 in relation to the payment of land tax for a
principal place of residence; or
(b) a concession in relation to the payment of rates if
you are a pensioner.
If
you think you are entitled to these concessions, you should make inquiries of the relevant
authorities.
7.9 Outgoings & Adjustments
In addition to the purchase price, the REIQ standard terms provide for
rates, land tax and other
outgoings to be apportioned as at the settlement date so that the seller is liable for all amounts
up to the settlement date and you are responsible for the
proportion of the outgoings relating to
the period from settlement onwards. In some circumstances these amounts (adjustments)
could be substantial, for example land tax, and could in
certain circumstances result in you
having to pay a considerable amount above the balance purchase price. We are not able to
calculate the adjustments (and what may be payable by you,
if anything) until we get our search
results. You may wish to instruct us to order these searches immediately.
7.10 Unregistered encumbrances
There may be unregistered encumbrances which affect the property or the
title such as:-
(a) unregistered water, sewerage or combine drains; or
(b) access or extraction rights under the Greenhouse Gas
Storage Act 2009; Geothermal
Energy Act 2010 or the Petroleum and Gas (Production and Safety) Act 2004.
The standard searches may not reveal all unregistered encumbrances. In most local authorities
the written Council rates search will show the existence
of any sewerage or drainage lines
which traverse the property.
If you have any concerns about sewerage and drainage lines, access rights for geothermal
exploration or production or wish to search for other unregistered
encumbrances you should
contact us immediately.
7.11
State Government – Prescribed Projects
It is possible that the land you are purchasing may adjoin or be included
in an investigation area
or an affected area in respect to infrastructure projects being undertaken by the State
Government under the State Development and Public Works Organisation Act 1971 and
associated regulations, for example, water infrastructure
pipeline works.
The use and enjoyment of the land you propose to purchase
may be affected by any such
project even though the land is not directly affected. Our searches will only reveal matters
directly affecting your land.
We therefore suggest you make enquiries to ascertain if any prescribed
projects have been
declared
or proposed in the general vicinity of the land you propose to purchase.
7.12 Sustainability Declaration
The Building Act 1975 requires the seller to provide you with a sustainability
declaration in the
approved
form in relation to the property prior to advertising the property for sale.
The sustainability declaration:-
(a) must be given to you on request;
(b) must be displayed conspicuously at an open house or otherwise given to you at an
inspection of the home;
(c) should be included in any advertising material given
to you (other than at inspection
where (b) above applies); and
(d) must include reference to its location in any marketing material or advertisement about
the sale of the property.
Please let us know if you have not seen or been made aware of the existence
of the
sustainability
declaration.
A failure by a seller or the seller’s agent to provide
or display the sustainability declaration does
not entitle you to terminate the contract, however, you may be able to claim compensation if you
subsequently incur a loss or expense arising from a false
or misleading sustainability
declaration.
7.13
QBSA Owner Builder Notice
If:-
(a)
building work has been carried out on the property by a person who is not licensed to
carry out that building work; and
(b) the land is offered for sale within six (6) years after completion
of the building work,
the
seller has a statutory obligation before a contract is signed to give notice to a buyer
containing details of the work and the warning required by regulation.
If the notice and warning are not given then the seller will be taken to
have given the buyer a
contractual warranty that the building work was properly carried out. The effect of this is that if
the work turns out not to have been properly carried out
then you may have a right to claim
compensation from the seller.
Please let us know if you are aware of the seller having conducted any work as an owner
builder or if you have received any such notice from the
seller.
7.14 Neighbourhood Disputes
Please tell us if you have been told about or been given
any copies of documents relating to
disputes between the seller and neighbouring property owners about dividing fences or trees,
so that we can ascertain whether these disputes will affect
you. In particular, please tell us if
you are aware of any:-
.
notices to fence from a neighbour;
.
applications to QCAT in relation to fencing or trees; or
.
QCAT orders in relation to fencing or trees affecting the property?
In relation to trees;-
a. the seller should give you copies of any applications or orders and if copies are not
actually given to you prior to you entering into the contract
(irrespective of whether or
not the contract discloses that they exist) then you may be able to terminate the
contract at any time before settlement.
b. if you terminate the contract in these circumstances then the seller
may also be liable
for
your reasonable legal and other expenses incurred in relation to the contract after
you signed the contract.
.c. if you complete the purchase and the seller has not completed all work in relation to a
QCAT tree order which has not been given to you prior to
entering into the contract, the
seller will remain liable to carry out the work required under the order following
settlement.
In relation to fences:-
a. the Seller has warranted in the contract that there will be no unsatisfied fencing notices,
applications or orders existing at settlement.
b. if an unsatisfied notice, order or application exists at settlement
then you may be
entitled
to terminate the contract or claim compensation from the seller.
In relation to any notice, proceeding or order that affects the Property received by the Seller
after the contract date, the Seller is obliged under the
contract to give you a copy.
The
Seller also must not, after the contract date, give any notice, seek or consent to any order
or agreement that affects the Property without your prior
written consent.
Please contact us immediately with details of any disputes,
notices or orders relating to dividing
fences or trees given to you or of which you are aware so that we can advise how they will
affect you and what remedies you may have.
7.15 Instalment Contract
We will need to determine whether your contract is an instalment
contract. A contract can
become an instalment contract for many reasons including the following:-
(a) the deposit is more than 10%; or
(b) the deposit is stated to be non-refundable in all circumstances; or
(c) the buyer is given a rebate off the purchase price; or
(d) the buyer is required to pay money to the seller (other
than a 10% deposit) prior to
receiving a transfer and the amount payable under the contract exceeds market value
for what is provided in exchange. For example, a rent to
buy contract may require the
payment of instalments which exceed the market rent that would otherwise be payable.
The effect of the contract being an instalment contract is:-
(a) you can obtain another 30 days in which to settle;
(b) the seller is prohibited from re-selling or re-mortgaging
the property prior to settlement;
and
(c)
the seller may be required to comply with the National Credit Code, including the
requirements for pre-contractual disclosure, ongoing notices and certain
pre-requisites
to
enforcement.
Unless you instruct us to investigate the possibility that
your contract is an instalment contract,
we will assume that this investigation will not be of any benefit to you and that you wish to settle
the purchase on the settlement date. If, of course, your
capability to settle on the settlement
date changes at any time, you should let us know.
7.16 Transfer Duty
Transfer duty is a state tax which is payable on the transaction.
As transfer duty is applicable to each transaction, you must ensure that
the buyer named in the
contract is the person or entity that will own the property. By purchasing in the correct name
you will avoid multiple transactions and the prospect of
more than one assessment of transfer
duty, for example, purchasing in one name and then nominating a substitute buyer involves two
dutiable transactions and two assessments of transfer duty.
Concessions on the transfer duty are available if:-
(a) the property is being purchased in your own name, will be used as your
first home and
will
be occupied as your principal residence (“first principal place of residence
concession”); or
(b) the property is vacant land, is being purchased in your own name, will
be used to
construct
your first principal place of residence (“first home vacant land
concession”)
First Principal Place of Residence Concession
The concession is available if the property is your first home and if you intend to occupy the
property within 12 months of settlement. No transfer duty
is payable for purchases if the
property is your first home and is valued under $500,000. The concession progressively
reduces as the value of the acquired property increases
up to $600,000. There is no first home
concession where the value of the acquired property is $600,000 or greater and transfer duty in
this circumstance is payable at ordinary rates.
You will lose your entitlement to the full concession if:-
(a) you purchase an existing home and do not occupy the home within 12 months of
settlement for a continuous 12 month period;
(b) you have tenants in the residence and they do not vacate
the property within 6 months
of settlement or the tenants stay longer than the original lease; or
(c) you transfer, lease, rent, or otherwise grant exclusive possession
of your property
within
12 months of occupying the house or without ever having occupied the house at
all;
If you do any of these things, you must notify the Office of State Revenue within 28 days of any
of these events happening as your liability for transfer
duty will be reassessed. If you do not,
significant additional penalty duty may be payable and interest will be charged from when you
are liable to notify the Office of State Revenue. If applicable,
this is your responsibility and is
outside the scope of our retainer.
First Home Vacant Land Concession
A concession on transfer duty is available if the property is being purchased in your own name
and is vacant land to be used to construct your first home
which will be occupied as your
principal residence. No transfer duty is payable for purchases of first home vacant land up to
$250,000 in value. The concession progressively reduces
as the value of the acquired land
increases up to $400,000. There is no concession where the value of acquired land is
$400,000 or greater and transfer duty in this circumstance
is payable at ordinary rates. You will
lose your entitlement to the full concession if:-
(a) you purchase vacant land to build on and you have not built and occupied the house
within two years for a 12 month continuous period; or
(b) you transfer, lease, rent, or otherwise grant exclusive
possession of your property
within 12 months of occupying the house or without ever having occupied the house at
all;
If you do either of these things, you must notify the Office of State Revenue within 28 days of
either of these events happening as your liability for
transfer duty will be reassessed, If you do
not, significant additional penalty duty may be payable and interest will be charged from when
you are liable to notify the Office of State Revenue. If
applicable, this is your responsibility and
is outside the scope of our retainer.
All other purposes of acquisition
No concession on duty is available on a purchase as a principal place of residence (except
where it is your first home), for investment purposes or
a purchase by a company or trust.
7.17
Related Parties
You must tell us if you have a business or personal relationship with the seller or if the
consideration for the sale is less than market value. If
so, this will have duty implications and
we will require a valuation of 3 comparable sales within the last 3 months for duty assessment
purposes. If applicable, these valuations must meet certain
criteria and are required prior to or
at the time of duty being assessed and paid. You should telephone us immediately to discuss if
you think this may apply in the circumstances of this acquisition,
as failure to obtain the
valuations where required can result in serious adverse consequences for you, for example, the
imposition of penalty duty.
7.18 Seller’s Warranties
Under the contract the seller gives warranties about various
matters which could affect the
property, such as correctness of title, capacity to complete, no judgments, orders or writs
affecting the property, no unregistered dealings, no notices
of body corporate meetings and no
obligation to give an EPA notice.
If the seller breaches any of these warranties the buyer may:-
(a) terminate no later than two (2) days before settlement; or
(b) claim compensation prior to settlement and proceed to completion.
7.19 Property adversely affected
If the property is adversely affected at the contract date because:-
(a) the present use is not lawful;
(b) the land is affected by a proposal of a competent authority e.g. Transport
Infrastructure;
(c)
access or any services to the land passes unlawfully through other land;
(d) an authority has issued a current notice to treat, or notice of intention
to resume;
(e)
the property is affected by the Queensland Heritage Act 1992 or is included in the
World Heritage List,
and these facts are not disclosed in the contract, then you may be able to terminate the contract
up until two (2) business days prior to settlement. If
you do not terminate in accordance with the
contract, you will be treated as having accepted the property subject to these matters.
7.20 Survey
The searches we conduct cannot ascertain if there:-
(a) is an error in the boundaries/area of the land; or
(b) exists any encroachment onto or from the land.
Under the contract you are entitled to survey the land to establish the
location of structures on
the land or adjoining land. If there are errors in the boundaries then you may be entitled to
claim damages or terminate the contract.
If you wish to satisfy yourself about survey matters then you should engage
a surveyor to
survey
the land prior to settlement. If the surveyor makes any adverse observations you should
contact us immediately.
7.21 Pre-settlement Inspection
Under the contract you are entitled (after giving reasonable notice to
the seller) to enter the
property once for the purpose of conducting a pre-settlement inspection. We suggest you make
arrangements directly with the seller’s agent to
arrange to inspect the property closer to the time
of settlement and, amongst other things, check that no fixtures have been removed.
7.22 Transfer documents
We are able to sign the transfer documents on your behalf. We will send
a copy of the transfer
documents to you for your records.
7.23 Keys
The seller is obliged to deliver all keys to the property at completion. If there is an agent,
we will
arrange
for the seller to leave the keys with the agent and the keys can be collected by you from
the agent after settlement.
If this arrangement is not satisfactory please let us know and we will request that the keys be
available at settlement.
7.24 Other Professionals
We suggest you may wish to seek advice about the transaction
from the following other
professionals:-
(a)
an accountant – in relation to the commercial viability and tax considerations of the
purchase;
(b) a valuer – to assure yourself that the price represents the market
value of the property;
and
(c)
a town planner – to assess compliance issues or give advice regarding proposed future
development.
7.25 First Home Buyers’ Scheme
If you are purchasing your first home in Australia you may be eligible
for the Government’s First
Home Owners Grant. To find out if you are eligible you should contact your financier (if
applicable) or visit the Queensland Office of State Revenue
website:-
http://www.osr.qld.gov.au/first-home-owner-grant/index.shtml
It is up to you to apply for the grant if you think it applies to you and
we do not give any advice
or reminders in relation to the grant.
7.26 Queensland Building Boost Grant
If you are buying or building a new home in Queensland for a value less
than $600,000 (house
and land) then you may be eligible for the Queensland Building Boost Grant. The grant is
available for individuals and corporate purchasers who
enter into an eligible contract between 1
August 2011 and 31 January 2012. To see if you are eligible for the grant and how to apply for
the grant, see the Queensland Treasury Building Boost website:-
http://boost.treasury.qld.gov.au/faqs/index.php
It is up to you to apply for the grant if you think it applies to you and
we do not give any advice
or reminders in relation to the grant.
7.27 Settlement Notice
We will lodge a Form 23 Settlement Notice on the title of the property prior to settlement. The
effect of this notice is to protect your interest in the
property by prohibiting the registration of any
conflicting interest in the property (such as a writ of execution, mortgage or transfer to an
unrelated third party, but not a caveat) during the period
between settlement and when the
transfer in favour of you is lodged for registration at the Department of Environment and
Resource Management.
7.28 Utility Services
Please note that no adjustments are made at settlement in respect of electricity,
telephone or
gas
usage. We recommend that you arrange for connection of these services from the date of
proposed settlement to ensure that the appropriate readings and calculations
of the seller’s
obligations in relation to these services can be billed to the seller up to the date of settlement.
If a service provider will not arrange for connection from settlement without
authority or
confirmation
from the seller we would request that you obtain this via the real estate agent or
alternatively with the seller directly as it is beyond the scope of our
retainer.
7.29 Promises made by the Seller or the Agent
Unless
you have already or immediately now tell us of any promises made or warranties having
been made to you by the seller or the agent which are not contained in
the Contract, we will not
be aware of them. If you have been promised anything which is not shown in the Contract you
should tell us immediately. There is no protection for
you in the standard contract in relation to
such issues. Your options are to:-
(a) terminate under the cooling off period or some other contractual term (where
applicable); or
(b) make a claim for damages.
A court action is expensive and if you are aggrieved by the misrepresentation it may be
ultimately more cost effective to terminate using your
contractual rights if you have the
opportunity.
7.30
Building Covenants
Are you aware of any building covenants affecting the property or have you signed any
document relating to any covenants? If so, please provide
us with details and a copy of any
documents signed, as these may impact on your proposed use of the property or bind you to
additional contractual obligations or liabilities.
7.31 Electrical Safety Switch
If an approved electrical safety switch for general purpose
socket outlets has not been installed
in the property under the Electricity Regulations you are required to have one installed within 3
months following settlement. Failure to do so could result
in a $1,500 penalty.
7.32
Smoke Alarms
Failure to install compliant smoke alarms is an offence under the Fire and Rescue Service Act
1990. If the property does not have compliant smoke alarms
installed, you should ensure this is
done immediately following settlement.
8. ADDITIONAL MATTERS IF YOUR PURCHASE INVOLVES A RESIDENTIAL TENANCY
8.1 Residential Tenancy Inquiries
If you are purchasing the property subject to an existing residential tenancy
we recommend,
preferably
before signing the contract, that you instruct us to obtain a copy of the tenancy
documents from the seller and that the documents be reviewed and/or you
make inquiries of the
seller to ascertain:-
(a)
whether the tenancy is an enforceable agreement under the Residential Tenancies and
Rooming Accommodation Act 2008 and whether the seller complied with its
obligations
of
disclosure under the Act;
(b) whether the term is fixed or periodic and the time left to run;
(c) if the tenancy is longer than three (3) years, that it is registered;
(d) the current rent payable by the tenant;
(e) if the rent (or any other payments) are in arrears;
(f) if there are any special arrangements between the seller
and the tenant that do not
appear in the tenancy agreement;
(g) any discrepancies between the contract and the tenancy agreement;
(h) any unusual provisions in the tenancy agreement;
(i) whether a bond was requested and whether it is being
held by the Residential
Tenancies Authority;
(j) whether the seller is in dispute with the tenant on any issue.
If as a result of our inquiries we discover something adverse regarding the tenancy then we will
contact you to discuss.
8.2 Bond Transfer – Residential Tenancy
Assuming
you are satisfied with the results of our inquiries regarding the tenancy and you
proceed with the contract, the usual process for the transfer of the tenancy
agreement and bond
is
as follows:-
(a) a Residential Tenancies Authority Form 5 Change of
Lessor or Lessor’s Agent needs
to be prepared by us or your agent. Please instruct us who you intend to appoint as
agent, or organise your appointed agent to complete the
Form 5 and send it to us;
(b) we will send the Form 5 to the seller’s solicitors for the seller to sign;
(c) the seller will deliver the completed and signed Form
5 to us at settlement;
(d) following settlement we will forward the Form 5 to you for you or your agent or lodge
with the Residential Tenancies Authority;
(e) upon receipt, you must immediately:-
(i) send or have your agent send a copy of the Form 5 to the Residential
Tenancies Authority. (The bond will then be held on your
behalf by the
Authority);
and
(ii)
send (or have your agent send) a copy to the tenant so that the tenant knows
to pay future rental to you as landlord or to your agent.
9. ADDITIONAL MATTERS TO CONSIDER IF PURCHASING A UNIT
9.1 Review of BCCM Disclosure Statement
As part of our retainer we review the BCCM disclosure statement
provided with the contract.
The BCCM disclosure statement must be accompanied by a copy of the Community
Management Statement and will give you the following information:-
(a) details of the secretary or body corporate manager or in a specified
2 lot scheme, the
person
responsible for keeping records;
(b) details of the body corporate administrative and sinking fund levies that apply to the lot
you are purchasing and the extent to which those levies
are based on the contribution
schedule lot entitlements (“CSLE”) or the interest schedule lot entitlements (“ISLE”)
for
the
scheme;
(c)
a statement that the CSLE and ISLE are contained in the Community Management
Statement;
(d) improvements on common property for which you may be responsible;
(e) details of any body corporate assets; and
(f) that there is a committee of the body corporate or
a body corporate manager engaged
to perform the functions of the committee
If the disclosure statement contains omissions or is inaccurate and you would be materially
prejudiced if required to complete the contract, then you
may have rights to terminate the
contract. The only way to discover omissions or inaccuracies is to search the body corporate
records. We therefore recommend that you instruct us to
arrange a search of the body
corporate records.
9.2
Community Management Statement (CMS)
The CMS:-
(a)
tells you which regulation module applies to the scheme;
(b) specifies the CSLE for the lot and the aggregate CSLE.
(c) for a scheme established before 14 April 2011 the lot
entitlements must be equal,
except to the extent explained in the CMS that it is just and equitable in the
circumstances for them not to be equal (however, no explanation
is required if the
scheme
was established before 4 March 2003);
(d) for a scheme established after 14 April 2011:-
(i) must state that the CSLE are based on the equality principle or the relativity
principle;
(ii) if the equality principle applies, the lot entitlements must be equal,
except to
the
extent explained in the CMS that it is just and equitable in the
circumstances for them not to be equal;
(iii) if the relativity principle applies, the CMS must
include an explanation which
demonstrates the relationship between the lots by reference to one or more
particular relevant factors, including the following:-
(A) how the community titles scheme is structured;
(B) the nature, features and characteristics of the lots;
(C) the purposes for which the lots are used;
(D) the impact the lots may have on costs of maintaining
the common
property;
and
(E)
the market values of the lots.
(e) specifies the ISLE for the lot, the aggregate ISLE and for a scheme established after
14/4/2011, includes a statement that the ISLE reflects
the respective market values of
the lots and if not, the CMS must include an explanation as to why it is just and
equitable in the circumstances for the ISLE not to reflect
the respective market values
of the lots.
(f) sets out the by-laws which apply to the scheme. You should read these by-laws
carefully as they are the rules which apply to the scheme;
and
(g)
if exclusive use areas have been allocated the Community Management Statement will
include plans (and a supporting by-law) which show the exclusive use areas
allocated
to
various lots in the scheme.
The
CSLE is the basis for calculating your proportion of body corporate administrative and
sinking fund levies payable (except in the case of insurance) and is the
value of your voting
rights on an ordinary resolution of the body corporate.
The ISLE is the basis for calculating a portion of the insurance premium, your share of the
common property, your interest on termination of the scheme
and the unimproved value of the
lot.
If you have any concerns about how the ISLE or the CSLE
have been calculated or the principle
upon which the CSLE were decided, please contact us.
If the seller is the original owner for the community titles scheme established on or after
14/4/2011 and you reasonably believe:-
(a) the CSLE are inconsistent with the principle upon which they were decided;
and
(b)
you would be materially prejudiced if compelled to complete the contract,
you may terminate the contract before it settles, by notice in writing, given not later than thirty
(30) days (or a longer period agreed between the buyer
and the seller) after you (or your agent)
receives
a copy of the contract, which notice must identify the relevant section of the BCCM Act
upon which you rely.
In the event that the CMS recorded is different from that which has been disclosed and you are
materially prejudiced by the difference or inaccuracy,
you may terminate the contract by notice
in writing which may need to refer to the section of the action which you rely given:-
(a) fourteen (14) days after the contract is received; or
(b) another day agreed between the buyer and the seller.
It is possible that the CSLE may be amended in the following circumstances:-
(a) by passing a resolution without dissent or applying to a specialist
adjudicator or QCAT;
or
(b)
for an existing scheme where an adjustment order has previously been made, an
owner, by proposing a motion to the body corporate, obliges the body corporate
to
consider
having the scheme’s CSLE revert back to the pre-adjustment order figures.
This process will only be available until 14 April 2014.
If a change is made to the CSLE the amount you pay for body corporate fees
may be
significantly
different than what is disclosed now. If you want advice on this issue please
contact us.
9.3 Review of Caretaking and Letting Agreements
We do not undertake a review of the caretaking and letting agreements for
the scheme on your
behalf
as this is not included in the scope of our retainer. If you would like us to review those
agreements and provide a summary to you then you should
telephone us immediately.
If
you are purchasing as an investment and will be relying on the income from the letting
arrangements then, preferably before you sign the contract, but if not,
then before settlement,
we recommend that you instruct us to review the letting arrangements that apply to your lot and
advise you of the foreseeable legal risks arising from
the transaction.
There are many possible letting arrangements that may apply
to your lot. Below is a list of
documents that may exist and may apply to your lot:-
(a) a product disclosure statement under the Corporations Act 2001 issued by the letting
manager;
(b) a caretaking and letting agreement entered into by the body corporate
with the
manager;
(c) an agreement appointing a letting agent for your lot;
(d) a tenancy agreement or lease between you and any tenant
of the lot;
(e)
a leaseback agreement with the seller; or
(f) a rental guarantee offered by the seller.
If you have been given any of these documents we recommend that you should send them to
us for review. The review of the documents listed above
is not included in the scope of our
retainer and will be an additional cost to you.
In reviewing any of the above documents that apply to your lot we will not be providing financial
or commercial advice about the viability of the lot as
an investment. Our advice will be limited to
the associated legal risks, for example matters such as:-
(a) costs associated with the entry into the investment, including commissions, entry fees,
furniture;
(b) costs associated with exiting the investment including penalties;
(c) the terms and option periods of any leaseback to the
seller or letting agent;
(d) legal risks which could impact on the income stream from the property, such as default
by the seller or third party under the leaseback, possibility
of insolvency, default under
any rental guarantees, the lack of a guarantee, the adequacy of the guarantees;
(e) the need to protect you from risks of default by the
seller or a third party;
(f) the need to protect yourself from future interest rate rises over the period of the
investment;
(g) the practical difficulties of renegotiating leases after the expiry
of the leaseback
arrangement;
and
(h)
any restrictions on the use of the unit for residential purposes if you wish to cease the
investment at some stage.
For commercial advice you should seek the advice of a qualified accountant or financial advisor.
If you would like us to review any of the above documents that apply to
your lot you should
telephone
us immediately.
9.4 Body Corporate matters
The
contract requires the seller to notify you of any notices of body corporate meetings or any
resolutions passed at a body corporate meeting after the
contract date.
If you are materially prejudiced by any resolutions passed
after the contract date which are not
disclosed in the contract, you may be able to terminate the contract.
If you are notified of or become aware of a body corporate meeting proposed to be, or actually
held after the contract date you should contact us.
RESIDENTIAL
CONVEYANCING BOOKLET
FOR SELLERS
1.1
This Residential Conveyancing Booklet (“the Booklet”) is to be read in conjunction with the letter to which this Booklet is
attached (“the
First Letter”).
1.2
The First Letter contains information
which is specific to your transaction, such as:-
(a)
contract information;
(b)
critical dates;
(c)
what you need to do now;
(d)
information on identity, searches and PAMDA
compliance;
(e)
details of legal fees and outlays; and
(f)
a checklist of matters you need to attend to.
1.3
The Booklet contains information on the
following:-
(a)
what is included and excluded from our retainer;
(b)
an explanation of the contract terms;
(c)
risk and insurance;
(d)
how PAMDA affects you;
(e)
important contractual matters to consider; and
(f)
additional matters if selling a unit.
1.4
If you have any queries or questions
about the information provided to you, please call us.
2.1
What is included in our retainer?
Our
retainer to act in a conveyance includes all matters which the
Queensland Conveyancing Protocol (endorsed by the Queensland Law Society) recommends as being usual and necessary for the sale in
Queensland of houses and residential land or residential lots in a community
titles scheme.
If
you instruct us to exclude any of the steps that are generally
considered usual and necessary in a conveyance we are required by law to
provide you with a detailed explanation of the risks associated with these
exclusions. Advice of this nature is not
part of the usual conveyancing process and will be an extra cost to you.
2.2
What is excluded from our retainer?
Our
retainer does not extend to matters which go beyond what is usual
and necessary in the conveyancing process.
We consider the following items to be excluded:-
(a)
No
financial/tax/matrimonial advice
Advice regarding the commercial viability
of the transaction or the tax, succession, matrimonial or other financial
implications of the sale. If you require
advice on the commercial viability or the tax implications of the sale you
should seek the advice of a specialist financial adviser or tax professional
such as your accountant.
(b)
Sustainability
Declaration
We
do not, as part of our retainer, prepare or check the accuracy of any
sustainability declaration given by you.
You will need to prepare the sustainability declaration (see paragraph
headed “Sustainability Declaration”).
(c)
Survey
We do
not conduct a survey of the property.
Issues such as encroachments will not be identified unless a survey is
conducted. While it is not usual for a
seller to conduct a survey, a buyer may have rights if any encroachments are
identified. If you are aware of any
encroachments please tell us so they can be disclosed in the contract.
(d)
Eligibility
for concessions/grants
If you have previously obtained the first
home owners grant or a first home, home or first home vacant land duty
concession, your sale of the property may affect your continued eligibility for
these schemes. We do not check whether
you will have any obligation to refund a part\all of your entitlement to a
concession or grant. See paragraphs 8.4
and 8.5
for further information.
(e)
National
Rental Affordability Scheme (NRAS) lease or arrangement
Unless
we have specifically agreed in writing with you, we will not be providing
advice on any NRAS lease or arrangement that may be related to your sale and it
will be beyond the scope of work and advice we will be providing. NRAS arrangements
are very complex in nature
and may require specialist legal advice from within our firm or from another
firm. It is your responsibility to
ensure you are receiving NRAS advice for this transaction and if you choose not
to you may suffer loss.
2.3
Method of Sale
In
Queensland property is sold by the following methods:-
(a)
private treaty, where you negotiate the contract
price and terms with the buyer, often with the assistance of a real estate
agent;
(b)
auction, where terms are set by the seller and
the price determined by competitive bid, subject to a reserve; or
(c)
tender, which is another form of competitive
bidding.
3.
EXPLANATION OF THE CONTRACT TERMS
3.1
Form of contract
There
are two forms of contract recommended by the Real Estate
Institute of Queensland and the Queensland Law Society. They are:-
(a)
Houses and Residential Land (9th Edition); and
(b)
Residential Lots in a Community Titles Scheme (5th Edition).
You
should read your contract in detail, in particular the
reference schedule.
In
this section we point out contract terms which we consider
important in relation to your sale.
3.2
Reference Schedule
The
reference schedule contains the particulars which are relevant
to your contract. These particulars are
set out in the First Letter. You need to
check that they are accurate and tell us immediately if the particulars are not
accurate.
3.3
Time essential
Time
is of the essence of the contract. This is a legal term that means that you must
perform your obligations under the contract strictly by 5:00pm (or other
specified times) on the specified due date.
For example, you must be ready willing and able to settle on the settlement
date, otherwise the buyer may either terminate or affirm the contract. In both
cases, the buyer would also be able
to claim damages from you.
In
certain limited circumstances where either party is unable to
meet their settlement obligations because of a natural disaster (for example
the January 2011 South-East Queensland floods) time will no longer be of the
essence.
When
the natural disaster no longer prevents that party from
performing their settlement obligations:
(a)
that party is obliged to serve a notice advising
that they are no longer affected; and
(b)
either party may serve a notice to settle which
must state that the suspension has ended, nominate a new settlement date (which
must be not less than 5 but not more than 10 Business Days after the date of
the notice) and that time is of the essence.
The
suspension of time has then ended and both parties are obliged
to settle on the date stated in the notice to settle.
3.4
Deposit
Payment
of the deposit is a sign of the buyer’s intention to
proceed with the contract. It is
usually a substantial amount (but no more than 10%). If the contract becomes
unconditional and if the buyer later defaults under the contract then you may
be entitled to forfeit the deposit and sue the buyer for damages. The deposit
is generally held in trust by an
agent or lawyer until settlement and following settlement the deposit will be
paid to you (usually less the agent’s commission). It is therefore important
that the deposit
holder be either a solicitor or a real estate agent and that the deposit is
held in a trust account.
If
the buyer were to terminate for valid reasons in accordance with
the contract, then the deposit would be repayable to the buyer. If the deposit
is not paid on time or the
buyer is otherwise in fundamental breach of the contract, you will be able to
terminate the contract and forfeit the deposit.
You may recover from the buyer as a liquidated debt any part of the
deposit which is not paid when required.
If you are obliged to pay GST you will have to pay GST on the forfeited
deposit. You may also, depending on the
terms of appointment of your agent, be liable to pay your agent’s commission and
would be entitled to include any commission paid in a claim for damages against
the buyer.
3.5
Finance
If
the contract is subject to finance, the buyer is required to
take all reasonable steps to obtain finance approval and notify us as to
whether finance is approved before 5:00pm on the finance date. If the buyer does
not notify us that finance
is approved then the contract remains on foot and either party can terminate
the contract.
The
buyer also has a continuing right to give notice of receipt of
satisfactory finance or alternatively to waive the benefit of the finance
condition up until the time the contract is terminated by you.
3.6
Building and Pest Inspections
If
the contract is subject to building and pest reports, the
contract requires the buyer to take all reasonable steps to obtain the reports
and notify us as to whether the reports are satisfactory before 5:00pm on the
inspection date. If the buyer does not notify
us that the building and pest reports are satisfactory then the contract remains
on foot and either party may terminate the contract.
The
buyer also has a continuing right to give notice of receipt of
satisfactory finance or waive the benefit of the building and pest condition up
until the time the contract is terminated by you.
3.7
Cheques for settlement
The
contract only obliges the buyer to pay for bank cheques in
favour of the seller and the seller’s financier at settlement. If you require
additional bank cheques you
must pay the cost of those at settlement, unless the buyer agrees in writing
prior to settlement to draw trust cheques for those amounts.
The
property will be at the buyer’s risk from 5:00pm on the first
business day after the contract date.
Despite this, we strongly recommend that you maintain your insurance
policy until following settlement in the event that the buyer does not insure
the property and there is a loss.
You
have a continuing obligation until settlement to take reasonable
care of the property and if the property becomes “unfit for occupation” as a
dwelling prior to settlement, then the buyer may have a right to withdraw from
the contract.
5.
How does the Property Agents and Motor Dealers
Act 2000 (“PAMDA”) affect you?
5.1
Warning Statement
PAMDA requires that all contracts for the sale of residential
property in Queensland have attached a PAMD Form 30c Warning Statement (“Warning
Statement”).
The only exceptions are where:
(a)
the property is sold under the fall of the
hammer at auction, however if the property is passed in a Warning Statement
must be attached to the contract; and
(b)
a buyer drafts and submits a signed contract to
a seller as an offer to buy.
PAMDA
also requires that a certain process be followed and certain
directions be given by a seller or the seller’s agent in the formation of a contract.
This involves:-
(a)
ensuring that the correct version of the PAMD
Form 30c Warning Statement has been properly attached to the contract;
(b)
ensuring that if the sale is of a unit, the
correct version of the BCCM Form 14 Information Sheet has been properly
attached to the contract; and
(c)
ensuring that the buyer’s attention has been
properly directed to the Warning Statement, and if a unit, the Information
Sheet and the contract.
If
the Warning Statement is not properly attached or the buyer’s
attention is not properly directed to the relevant documents in accordance with
PAMDA then the buyer may be able to terminate the contract, unless one of the
bars to termination apply, namely that:-
(a)
the buyer signed the Warning Statement and if a
unit, the Information Sheet, which were attached to the contract at the time of
signing, before signing the contract; and/or
(b)
more than 90 days has elapsed from the day the
buyer received the contract signed by both parties.
5.2
Information Sheet
The Body Corporate and
Community Management Act 1997 (“BCCMA”)
requires that all contracts in relation to lots in a community titles scheme have
attached a BCCM Form 14 (“Information
Sheet”). As with the Warning
Statement, an Information Sheet is not required to be attached if the property
is sold at auction.
If
the Information Sheet is not properly attached or the buyer’s
attention not properly directed to the relevant documents in accordance with
PAMDA then the buyer may be able to terminate the contract, unless one of the
bars to termination apply, namely that:-
(a)
the buyer has signed the Information Sheet,
which was attached to the contract at the time of signing, before signing the
contract; and/or
(b)
more than 90 days has elapsed from the day the
buyer received the contract signed by both parties.
5.3
Cooling Off Period
Under PAMDA, unless the buyer waives
the cooling off period, the buyer is entitled to a 5 business day cooling off
period. This period starts on the day
that the buyer or the buyer’s solicitor receives the contract signed by both parties,
returned in accordance with the requirements of PAMDA or if you signed the
contract before the buyer did, then on the day that the buyer signed the
contract and communicated acceptance to the seller. The cooling off period ends
at 5:00pm on the
fifth business day.
The
buyer is entitled to terminate the contract during the cooling
off period. If the buyer terminates the
contract during the cooling off period, you are entitled to retain a
termination penalty equivalent to 0.25% of the purchase price from the deposit
up to a maximum of the full deposit amount.
The balance deposit must be refunded to the buyer within 14 days
following termination.
It
is possible for a buyer to waive the benefit of the cooling off
period by giving a properly completed Lawyer’s Certificate in the approved form
before signing the contract. It is up to
you whether you wish to insist on this from the buyer or not. If you require the
buyer to waive the benefit
of the cooling off period please telephone us to discuss.
5.4
Valuation
The
contract provides that you must allow the buyer’s valuer access
to the property (after receiving reasonable notice) once prior to settlement
for the purpose of valuing the property.
5.5
Vacant land – Non residential use pre-contract
notice
If
you are selling vacant land through an agent or auctioneer and
at the date of the contract the land is not able to be lawfully used for
residential purposes your agent or auctioneer is required prior to entering
into the contract to give the buyer a notice under sections 149/226 of PAMDA
stating, amongst other things, that the land is not able to be lawfully used
for residential purposes.
If:-
(a)
you are selling vacant land;
(b)
the land cannot be lawfully used for residential
purposes; and
(c)
your agent or auctioneer has not given a notice under
s.149/s.226 of PAMDA that the land cannot be used for residential purposes or
the notice was materially defective,
you
need to tell us immediately, as the buyer may have a right
under s.150/s.227 of PAMDA to avoid the contract by giving a notice of
avoidance within 6 months of the contract date.
If the contract is
avoided, you and your agent will both be liable to pay to the buyer all amounts
paid by the buyer under the contract and amounts paid for legal and other
expenses after the contract was signed.
The buyer could also require that the property be reconveyed to you
following settlement and that you pay the associated costs. It is therefore important
to ensure this
notice was given prior to the buyer signing the contract.
If this notice has
been given please forward a copy to us to check.
If the notice has
not been given and the contract has not yet been issued we will arrange for the
notice to be prepared and issued prior to the contract.
If the notice has
not been given and the contract has issued to the buyer but not yet been signed,
we suggest the contract be withdrawn and reissued after giving the notice.
If the notice has
not been given and the contract is signed the only sure way to rectify the
problem is for the buyer and seller to mutually terminate the contract and
reissue in the proper manner. Prior to taking any action you should contact us
for further advice so you can make an informed decision on how to proceed.
6.
warranties and disclosure
6.1
Seller’s warranties
Under
the contract the seller gives warranties about various
matters which could affect the property, in particular:-
(a)
that you are the registered owner of the
property;
(b)
you are capable of completing the sale;
(c)
there are no unsatisfied judgments, orders or writs
affecting the property (and if a unit, the common property) and no current
threats or claims that might lead to a judgment order or writ affecting the
property (and if a unit, the common property);
(d)
there are no unregistered encumbrances, leases
or other dealings;
(e)
in relation to the Environmental Protection Act 1994 (“EPA”):-
(i)
there is no outstanding obligation to give
notice under the EPA of a notifiable activity on the land;
(ii)
you are not aware of facts or circumstances that
may lead to the land being classified as contaminated under the EPA.
6.2
Consequence of breach of warranty
If
you breach any of these warranties the buyer may:-
(a)
terminate the contract no later than 2 days
before settlement; or
(b)
claim compensation, prior to settlement, and
proceed to completion.
6.3
Property adversely affected
If
the property is adversely affected at the contract date
because:-
(a)
the present use is not lawful;
(b)
the land is affected by a proposal of a
competent authority e.g. Transport Infrastructure;
(c)
access or any services to the land passes
unlawfully through other land;
(d)
an authority has issued a current notice to
treat, or notice of intention to resume;
(e)
the property is affected by the Queensland Heritage
Act 1992 or is
included in the World Heritage List,
and
these facts are not disclosed in the contract, then the buyer is entitled to terminate
the
contract up until 2 business days prior to settlement. If the buyer does not terminate
in accordance
with the contract, the buyer will be treated as having accepted the property
subject to these matters.
6.4
Matters you need to disclose
To enable us to make the appropriate disclosure, please
telephone us if you are aware of any of the following, or other particular or
unusual features affecting the property, such as:-
(a)
unregistered encumbrances, for example, water,
sewerage or combine drains which traverse the property;
(b)
access rights for geothermal exploration or
production under the Greenhouse Gas
Storage Act 2009, Geothermal Energy Act
2010, or the Petroleum and Gas
(Production and Safety) Act 2004;
(c)
notices to do work issued by the local
government or any court or tribunal;
(d)
building covenants;
(e)
easements;
(f)
equitable mortgages;
(g)
leases;
(h)
known minor encroachments by fences or trees;
(i)
any heritage listings;
(j)
road widening or any notice of a proposed road
widening;
(k)
proposed resumptions;
(l)
any unsatisfied judgments, orders or writs
affecting the property, the common property or body corporate assets;
(m)
any threatened claims notices or proceedings
that may lead to a judgment order or writ (e.g. orders or applications to QCAT
in relation to trees on the property); or
(n)
ongoing conditions of development approvals, for
example, the existence of a bushfire management plan affecting the property.
If you fail to make proper disclosure in the contract the
buyer may have rights to terminate the contract and/or claim damages. For example,
if you fail to disclose in the
contract that a sewerage or drain line traverses your property this will be a
defect in title which, if material to the buyer, may allow the buyer to terminate
the contract or claim damages.
6.5
EPA
Disclosure
The EPA requires
that you disclose in the contract any of the following, if applicable:-
(a)
if
the land is the subject of a notice issued under the EPA informing you that the
Environmental Protection Authority believes the land has been or is used for a
notifiable activity or is contaminated, a notice to conduct or commission a
site investigation, a remediation notice or a notice that the Environmental
Protection Authority requires a site management plan to be prepared for the
land; or
(b)
if
a magistrate issues an order under the EPA for an authorised person to enter
the land to conduct an investigation or to conduct work.
If any of these
situations arise and they are not disclosed in a notification by you under the EPA
prior to you entering into the contract then the buyer may terminate the
contract by notice given before the earlier of completion or possession. In this
event, all money paid by the buyer
must be refunded to it.
Please contact us
immediately if you think any of these matters may apply to the land or if you
think that it may be contaminated. If
the contract has not been signed it is important that these matters be
disclosed in a notice to the buyer prior to the buyer entering the contract.
6.6
Administrative
Advices
Administrative
advices may also reveal other interests impacting on the land that require
disclosure by you such as heritage listing or agreements, coastal protection
notices, nature conservation orders, vegetation clearing offences, Milton
Brewery notices (in respect of a unit) or water licences.
In addition an administrative advice is lodged on the title where land
is declared acquisition land under the Queensland
Reconstruction Authority Act 2011 (QLD) and the following applies:-
(a)
you
are not able to sell the land other than to the relevant authority;
(b)
if
you do want to sell the land the relevant authority must acquire it.
If there is
an administrative advice of this nature on your land, you should not sign a
contract to sell the land to any person other than the relevant authority. However,
if you have already signed a
contract:-
(a)
the
contract is not invalid and the buyer is treated as having received notice that
the land is declared acquisition land;
(b)
your
rights as seller and any rights that the buyer may have will depend upon the
terms of the contract.
There may also be
unregistered interests affecting the title under statute such as access
agreements under the Greenhouse Gas Storage
Act 2009; Geothermal Energy Act 2010;
Petroleum and Gas (Production and Safety)
Act 2004. Please tell us immediately
if you think any of these issues may affect the property.
6.7
Sustainability Declaration
The
Building Act 1975
requires you to provide the buyer with a sustainability declaration in the
approved form in relation to the property prior to advertising the property for
sale.
The
sustainability declaration:-
(a)
must be given to a buyer on request;
(b)
must be displayed conspicuously at an open for
inspection or otherwise given to the buyer at an inspection of the home;
(c)
should be included in any advertising material
given to a buyer (other than at inspection where (b)
above applies); and
(d)
must include reference to its location in any marketing
material or advertisement about the sale of the property.
Please confirm the buyer has been given a sustainability
declaration.
A
failure by you or your agent to provide or display the sustainability
declaration does not entitle a buyer to terminate the contract, however, the
buyer may be able to claim compensation if it subsequently incurs a loss or
expense arising from a false or misleading sustainability declaration.
A copy of the form
that you need to complete can be obtained from the Department of Local
Government and Planning web site: http://www.dlgp.qld.gov.au/resources/form/sustainable-housing/sustainability-declaration-form.pdf
6.8
QBSA Owner Builder Notice
If:-
(a)
building work has been carried out on the
property by a person who is not licensed to carry out that building work; and
(b)
the land is offered for sale within 6 years
after completion of the building work,
you
have a statutory obligation before a contract is signed to give
notice to a buyer containing details of the work and the warning required by
regulation.
If
the notice and warning are not given then you will be taken to
have given the buyer a contractual warranty that the building work was properly
carried out. The effect of this is that if the work turns out not to have been
properly carried out then the buyer may have a right to claim compensation from
you.
Please
let us know if you conducted any work as an owner builder so
that we can prepare the relevant notice.
6.9
Consumer Guarantees
In
some circumstances where goods are being supplied as part of the
sale of the property, the consumer guarantees contained in the Australian
Consumer Law will apply. These
guarantees cannot be contracted out of, however, where:-
(a)
the value of each of those goods (if sold
separately) is under $40,000; and
(b)
the goods are not goods of a kind ordinarily
acquired for personal, domestic or household use, for example industrial
air-conditioning or other plant,
then
it is possible to limit your liability under some guarantees
to the repair or replacement of those goods, that is, you can limit claims for any
other reasonably foreseeable loss or damage resulting from failure to comply
with a consumer guarantee.
If
you think this applies and you would like us to include a
special condition to limit your liability in this way, please contact us to
discuss.
6.10
Neighbourhood Disputes
Please
tell us if you are currently in dispute with neighbouring
property owners about fences or trees as these disputes may need to be
disclosed to the buyer. In particular,
please tell us if you are aware of any:-
·
notices to fence from a neighbour;
·
applications to the Queensland Civil and
Administrative Tribunal (“QCAT”)
in relation to fencing or
trees; or
·
QCAT orders in relation to fencing or trees
affecting the property.
In
relation to trees you must give copies of these documents
relating to trees to the buyer prior to the buyer entering into the contract
and specific disclosure may need to be made in the contract. If copies of
documents relating to trees are not given then you may be liable to pay a
significant financial penalty and the buyer may terminate the contract at any
time before settlement or you may be liable to comply with the order following
settlement.
If
the buyer terminates in these circumstances prior to settlement
you may also be liable for the buyer’s reasonable legal and other expenses
incurred by the buyer in relation to the contract after the buyer signed the
contract.
If
the buyer completes the purchase and you have not completed all
work in relation to a QCAT tree order which has not been given prior to the
buyer’s entry into the contract, you will remain liable to carry out the work
required under the order.
In
relation to fences you have warranted in the contract that there
will are no unsatisfied fencing notices, orders or applications existing at settlement
that were not disclosed in the contract to the buyer. If an unsatisfied notice,
order or application
exists at settlement then the buyer may be entitled to terminate the contract
or claim compensation from you.
You
are also obliged under the contract to promptly give the buyer
a copy of any notice, proceeding or order, received after the contract date,
that affects the Property. You must not,
after the contract date, give any notice to another party or seek or consent to
any order or agreement that affects the Property without the buyers prior
written consent.
Please
contact us immediately with details of any disputes relating
to dividing fences or trees so that we can ascertain if disclosure has, must or
can still be made and advise you accordingly.
7.1
What is a “swimming pool”
A regulated swimming pool is any excavation or structure
capable of being filled with water to a depth of 300mm or more including a
pool, spa pool/tub or wading pool, but generally does not include a fish pond
(or similar ornamental water feature), dam, water tank, watercourse, spa bath
in a bathroom (unless continually filled with 300mm or more of water) or
birthing pool.
If you have any doubt as to whether a pool is situated on the
property, then you should contact us.
7.2
Pool Safety
Register
Owners of swimming pools are
responsible for ensuring that their pool is recorded in the Pool Safety
Register. Failure to do so can result in
a $2,000 fine.
7.3
Non-shared pool – obligation to obtain Pool
Safety Certificate
Where there is a pool on the property (or on adjacent land
used in association with the property) that is a non-shared pool and there is
no Pool Safety Compliance or Exemption Certificate in effect, you must not
enter into a contract to sell the property without giving the buyer a Form 36
Notice of No Pool Safety Certificate.
In
addition, if you will not be giving a Pool Safety Compliance or
Exemption Certificate you must, prior to settlement, notify the chief executive
of the Department of Local Government and Planning that a Pool Safety
Certificate is not in effect. We
will provide a copy of the Form 36 Notice of No Pool Safety Certificate to the chief
executive, Department of Local Government and Planning.
The
contract requires you to complete following questions:-
Q1 - is there a pool
on the property or on
adjacent land used in association with the property?
Q2 - will a Pool Safety
Compliance or Exemption
Certificate (which includes a Pool Safety Certificate, a building certificate
that may be used instead of a Pool Safety Certificate or an exemption from
compliance)be given to the buyer at settlement?
Q3
- has a Notice of No Pool
Safety Certificate been given?
If
you indicate that a Pool Safety Compliance or Exemption
Certificate will be given to the buyer at settlement then you must hand over a
copy of a current Pool Safety Certificate, building certificate that may be
used instead of a Pool Safety Certificate or an exemption from compliance at or
prior to settlement, failing which the buyer can terminate the contract. If any
of the certificates expire prior to settlement,
you must obtain a new certificate which is in effect at settlement.
If
you indicate that there is no Pool Safety Compliance or
Exemption Certificate or do not complete the questions, the contract is
conditional upon the buyer obtaining from a licensed pool safety inspector:-
(a)
confirmation that the pool safety requirements
have been met and the issue of a Pool Safety Certificate; or
(b)
confirmation of the works required before a Pool
Safety Certificate can be issued.
Under
the contract, the buyer has until the Pool Safety Inspection
Date to notify us that:-
(a)
a pool safety inspector has issued a Pool Safety
Certificate in which case neither party has further rights; or
(b)
if a Pool Safety Certificate is not issued, that
the buyer terminates the contract. The
buyer must act reasonably in making this decision; or
(c)
the buyer elects to waive the benefit of the
condition and proceed to settlement, in which case the buyer becomes
responsible for obtaining the Pool Safety Certificate within 90 days of
settlement.
You
are also entitled to obtain a Pool Safety Certificate in this
period and if you do then you should tell us and we will give notice that the
condition is satisfied and the buyer’s right to terminate will end.
If
a Pool Safety Certificate has not issued and the buyer does not
give notice the contract remains on foot and both you and the buyer have a
right to terminate the contract, unless a copy of a current Pool Safety
Certificate is received. The buyer also has the right to waive the benefit of
the condition.
7.4
Shared Pool
In
the case of a shared pool (e.g. a pool on the scheme land of an
apartment building) the body corporate is responsible for obtaining the Pool
Safety Certificate. You have an
obligation, prior to settlement, where a Pool Safety Certificate is not in
effect, to give a Notice of No Pool Safety Certificate to:-
·
the buyer;
·
the Body Corporate (being the owner of the
shared pool); and
·
the chief executive of the Department of Local
Government and Planning. We will
provide a copy of the Form 36 Notice
of No Pool Safety Certificate to the chief executive, Department of Local
Government and Planning and the Body Corporate.
The
owner of the shared pool (usually the body corporate) then has
90 days in which to obtain a Pool Safety Certificate, subject to the
transitional arrangements which:-
(a)
in the case of a shared pool used for short term
accommodation, extends the time to 1 June 2011; and
(b)
in the case of any other shared pool, extends
the time to 1 December 2012.
7.5
Where a tenancy is proposed
You
are prohibited from entering into a lease or tenancy of
premises with a non-shared pool without first obtaining a Pool Safety
Certificate.
This
prohibition on leasing premises with a non-shared pool prior
to obtaining a pool safety certificate applies to all new leases or tenancies
entered into on or after 1 December 2010, subject to some exceptions and
extensions in particular circumstances.
7.6
Penalties
There
are substantial penalties for non-compliance.
8.
important contractual matters for you to
consider
8.1
Present
Use
If the present use
is not lawful under the relevant town planning scheme as at the contract date
and this has not been disclosed in the contract then the buyer may be able to
terminate the contract up until 2 business days before the settlement date.
8.2
Instalment Contract
We
need to determine at the contract preparation stage, when the
contract is first received by us and also any time a variation is proposed, whether
your contract is an instalment contract.
A contract can become an instalment contract for many reasons including
the following:-
(a)
the deposit is more than 10%; or
(b)
the deposit is stated to be non-refundable in
all circumstances; or
(c)
the buyer is given a rebate off the purchase
price effective prior to settlement; or
(d)
the buyer is required to pay money to you (other
than a 10% deposit) prior to receiving a transfer and the amount payable under the
contract exceeds market value for what is provided in exchange. For example, a
rent to buy contract may
require the payment of instalments which exceed the market rent that would
otherwise be payable.
8.3
Effect of Instalment Contract
The
effect of the contract being an instalment contract is:-
(a)
you cannot force the buyer to settle without
giving a notice which requires the buyer to settle in 30 days;
(b)
you are prohibited from re-selling or
re-mortgaging the property prior to settlement; and
(c)
you may be required to comply with the National
Credit Code, including the requirements for pre-contractual disclosure, ongoing
notices and certain pre-requisites to enforcement.
An
instalment contract should be avoided or at the very least, you
should be aware the contract is or has become an instalment contract.
8.4
Transfer Duty
Transfer
duty is a state tax which is payable on the transaction.
It
is a liability of both the seller and buyer. However the contract determines that
it is
the responsibility of the buyer to pay this liability. If for whatever reason
the buyer does not pay
the duty then the Office of State Revenue may have recourse against you as seller
for the duty. This is, however, unlikely
as the buyer will need to pay duty before the property can be registered in the
buyer’s name.
You
must tell us if you
have a business or personal relationship with the buyer or if the consideration
for the sale is less than market value. If so, this will have duty implications and the buyer will need to obtain a
valuation of 3 comparable sales in the
previous 3 months for duty assessment
purposes. If applicable, it is
important that we alert the buyer’s solicitor to this fact because if the buyer
does not fulfil its obligations regarding the payment of duty then the Office
of State Revenue can seek to recover any shortfall directly from you. You
should telephone us to discuss if you think this may apply in the circumstances
of this sale.
If
you obtained a transfer duty concession when purchasing the
property on the basis that you would live in it continuously for a period of at
least 12 months, then you should now review whether you have met your
obligations. If you:-
·
purchased an existing home and did not
occupy the home within 12 months of settlement for a continuous 12 month period;
·
purchased vacant land to build on and you
have not built and occupied the house within 2 years for a 12 month
continuous period;
·
had tenants in the residence and they did not
vacate the property within 6 months of settlement or the tenants stayed longer
than the original lease; or
·
have already transferred, leased, rented, or
otherwise granted exclusive possession of your property within 12 months of
occupying the house or without ever having occupied the house at all;
then
you must notify the Office of State Revenue within 28 days of any
of these events happening as your liability for transfer duty will be
reassessed. If you do not, significant
additional penalty duty may be payable and interest charged from when you are
liable to notify the Office of State Revenue.
If applicable, this is your responsibility and is outside the scope of
our retainer.
8.5
First Home Owner’s Grant/Qld Building Boost
Grant
If
you obtained either the First Home Owner’s Grant or the
Queensland Building Boost Grant and if now, due to the current sale, you no
longer satisfy the eligibility requirements for those grants, you should notify
the relevant State Government departments who administer those grants with
details of the sale as you may be required to repay some or all of those grant
monies. To investigate whether you are
required to notify, you should check the forms signed and information received
when you applied for the grants, and the following relevant web sites:-
FHOG
– http://www.osr.qld.gov.au/first-home-owner-grant/index.shtml
Building
Boost - http://boost.treasury.qld.gov.au/faqs/index.php
We
do not give any advice or reminders in relation to these grants
or whether you may have to notify and repay money. You should check this for yourself.
8.6
Survey
Under
the contract the buyer is entitled to survey the land to
establish the location of structures on the land or adjoining land. If there are
errors in the boundaries then the
buyer may be entitled to claim damages or terminate the contract.
8.7
Pre-settlement Inspection
Under
the contract the buyer is entitled (after giving reasonable
notice to you) to enter the property once for the purpose of conducting a
pre-settlement inspection to check on the condition of the property. You need
to co-operate with the buyer and if
a request for inspection is received, we suggest you make arrangements directly
with your agent and ensure your agent is present when the buyer inspects the
property.
8.8
Transfer documents
All
parties comprising the seller, need to sign the transfer
documents. Any individuals must sign in
the presence of a Justice of the Peace or a Solicitor and a company must sign
in accordance with section 127 Corporations
Act 2001 (Cth). You will need to
arrange for all signatories
to be in a position to sign the transfer documents expeditiously once they are
received. If you would like to attend at
our office for the purpose of executing transfer documents please let us know
and we will retain the transfer documents once received.
8.9
Keys
All
keys to the premises must be delivered at completion. You will need to make a
written record for
the buyer of all codes and combinations, if applicable, necessary to fasten or
unfasten any lock including electronic devices in the property. If the buyer requests
that we deliver the
keys at settlement you will need to deliver them to our office prior to
settlement. The usual situation is that the
keys should be left with the agent prior to settlement for collection by the
buyer following completion.
8.10
Chattels
Prior
to completion you must remove all chattels not included in
the sale and any substantial rubbish on the property. You may also remove any
fixtures which have
been excluded from the sale (See item 2 of the First Letter). If the property
is being sold subject to
vacant possession, then this obligation requires that both your property and
any tenant’s property (if tenanted) must be removed prior to the actual time of
settlement on the settlement date.
8.11
Other Professionals
We
suggest you may wish to seek advice from an accountant (if
required) in relation to the commercial viability and tax implications of the
sale.
8.12
Utility Services
No
adjustments are made at settlement in respect of charges for
usage of electricity, telephone or gas etc.
We recommend that you arrange for disconnection of these services on the
proposed settlement date so that readings and adjustments only up to that date
are billed to you. Please note that you should check your agreements with
service providers for any fees or terms relating to discontinuing the service
as this is beyond the scope of our retainer.
8.13
Agent’s commission
If
your property is being sold through an agent, we will let the
agent know when settlement has been effected.
If the agent holds the deposit then the usual procedure is for the agent
to deduct commission from the deposit and forward the balance to you.
8.14
Land tax
If
you have a land tax assessment for the current year could you
please forward it to us as it will be useful in making settlement adjustments
under the contract. The standard
position under the contract is that the adjustment will be based on the
presumption that the seller is a natural person and owned no other land as at
the previous 30 June. This means that if
you are a corporate entity or you own other properties you may not be able to
recover from the buyer the amount of the land tax liability for the parcel
being sold attributable to the period following settlement.
8.15
Rates
Notice
Please
forward to us a photocopy of the latest Council Rates and
Water Utilities Notices for the property and tell us if they have been paid or are
still outstanding. If the notices are
still outstanding you should instruct us as to whether you intend to make
payment prior to settlement and, if so, provide us with evidence that the council/water
provider has received payment prior to settlement. (This is so we can calculate
the appropriate
adjustments to settlement figures.)
8.16
Land Valuation Act 2010
An
administrative advice called a Land Valuation Act Notice may be
recorded on title. If applicable, this
notice alerts potential buyers that a deduction for site improvement or an
offset allowance applies to the land.
You should specifically instruct us if you have applied for or have been
granted any deduction or allowance as in certain circumstances the Land
Valuation Act Notice may not yet have registered on the title to your property
and may register prior to settlement.
Where
there is a change of ownership, a deduction for site
improvement or an offset allowance will no longer apply. The unadjusted value
will then be used for
the calculation of local government rates, state land rent and/or land tax.
A
property details report, available by searching the Queensland
Valuation And Sales (QVAS) database at any of the DERM business centres,
specifically states the amounts of the site improvement deduction total and the
unadjusted value.
If
you are a Seller with a deduction for site improvement or an
offset allowance:-
(a)
you need to be aware that the deduction for site
improvements will be lost on a sale and this will impact on the land value for
rating and taxing purposes;
(b)
you need to ensure that neither you nor any real
estate or other agent acting on your behalf makes representations to the buyer
about the rates or tax liabilities that are currently payable or that will be
payable by the buyer after the property has settled as this information could
potentially be misleading to the buyer and could impact on the buyer’s decision
to ultimately purchase the property; and
(c)
we suggest you check to make sure the offset
allowance or deduction has reduced your rates and land tax.
8.17
Smoke Alarms
Failure
to install compliant smoke alarms is an offence under the Fire and Rescue Service Act
1990. If the property does not have compliant smoke
alarms installed, you should ensure this is done immediately. You will need to
declare whether compliant
alarms are installed, in the transfer documents.
8.18
Electrical Safety Switch
Please
let us know if an approved electrical safety switch for
general purpose socket outlets has been installed in the property under the
Electricity Regulations.
9.
ADDITIONAL MATTERS IF selling A UNIT
9.1
Body Corporate disclosures
The
contract requires you to notify the buyer of any notices of
body corporate meetings you receive and of any resolutions passed after the contract
date. If the buyer is materially
prejudiced by any resolutions passed after the contract date, the buyer may terminate
the contract. If disclosure is not made
prior to settlement, the buyer may sue for damages. Please tell us if you are,
or become aware of
any of the following:-
(a)
any proposal to record a new community
management statement or a notice of meeting for that purpose;
(b)
whether all body corporate consents to
improvements made by you to common property are in place;
(c)
whether the exclusive use allocations given to
the lot are recorded in the community management statement (for example, car
parking); and
(d)
the insurance details for the building and
public liability for the body corporate.
9.2
Implied warranties given about the body
corporate
The
BCCM Act also contains certain implied warranties. Please tell us if you are,
or become aware of
any of the following:-
(a)
any patent or latent defects in the lot, common
property or body corporate assets;
(b)
any actual or contingent or expected liabilities
of the body corporate; and
(c)
anything else you are aware of regarding the
affairs of the body corporate which may affect the buyer.
9.3
BCCM Disclosure Obligations
You
have disclosure obligations under the contract, at common law
and pursuant to statute. Generally, the
consequences of failing to give the required disclosure is that the buyer will
have a right of termination of the contract.
The
disclosure statement given with the contract must be
accompanied by a copy of the Community Management Statement and contain the
following information:-
(a)
details of the secretary or body corporate
manager or in a specified 2 lot scheme, the person responsible for keeping
records;
(b)
details of the regulation module which governs
the scheme;
(c)
details of the body corporate administrative and
sinking fund levies that apply to the lot you are selling and the extent to
which those levies are based on the contribution schedule lot entitlements
(“CSLE”) or the interest schedule lot entitlements (“ISLE”) for the scheme;
(d)
a statement that the CSLE and ISLE are contained
in the Community Management Statement;
(e)
details of improvements on common property for which
you may be responsible;
(f)
details of any body corporate assets; and.
(g)
that there is a committee of the body corporate
or a body corporate manager engaged to perform the functions of the committee.
If
the disclosure statement contains omissions or is inaccurate and
the buyer would be materially prejudiced if required to complete the contract,
then the buyer may have rights to terminate the contract.
The
only way to ensure all the relevant information is disclosed in
the disclosure statement and the contract is to conduct a full search of the
body corporate records. Whilst there is
a risk in not doing so, it is considered to be low if we obtain a copy of the
registered CMS, you provide us with the information we have requested and
instruct us to obtain a Body Corporate Information Certificate prior to
preparing or giving a disclosure statement.
Unless
you instruct us otherwise, we will not perform a full search
of the body corporate records and will rely on the registered CMS, the information
you disclose to us and the Body Corporate Information Certificate. If you would
prefer that we conduct a full
search of the body corporate records you should telephone us immediately.
