If you are selling a residential property you must have a contract for the sale of land prepared before the property is placed on the market for sale. The contract must contain prescribed documents as provided by Regulation 4 of the Conveyancing (Sale of Land Regulations) 2010. The prescribed documents include:
- Section 149 Certificate (unless the land is not in a local government area);
- A diagram for the land from a recognised sewerage, that purports to show the location of the authority’s sewer in relation to the land;
- A property certificate (ie. the title search) and the plan of the land that purports to show the location of the authority’s sewer in relation to the land;
- All deeds, dealings and other instruments that create easements, restrictions, positive covenants burdening (or benefiting) the land.
If you are selling a commercial or rural property you do not need a contract to advertise a property for sale but will need a contract once a sale has been negotiated.
You should always instruct an appropriately qualified person to prepare the contract for sale.
Should I use a firm of solicitors rather than a licened conveyancer?
Buying or selling a property can be one of the biggest financial decisions you will make. The consequences of making poor and uniformed decisions can prove to be quite costly and leave you with undesired results. By having a qualified solicitor from John Allanson & Associates, you can be assured that their experience and expertise will help contribute to the protection of your assets.
After years of study, a solicitor has sufficient knowledge in conveyancing to adequately deal with the buying and selling of property. This area of law requires expertise in the legal principles that governs our conveyancing law, which solicitors have.
Conveyancers are not licensed to advise clients on areas of law that are beyond ‘conveyancing work’, as defined by the Conveyancer’s Licensing Act 2003. While a solicitor can assist the client with all legal matters in regards to conveyancing, a conveyancer must cease to act as soon as the work moves beyond the scope of what is defined by "conveyancing work". A solicitor is able to provides a broader range of services to you when considering buying or selling a property.
What is "exchange"?
A contract to sell property becomes legally binding when the buyer and seller sign their respective copy of the contract for sale of land and the contracts are "exchanged". This generally means that each party has signed their own copy of the contract, which is then dated, and swapped or ‘exchanged’ with the other party.
Our advices is that exchange should take place only in the hands of one of the solicitors of the parties (often by the Vendor's solicitor). If the deposit amount isn't paid at exchange then the purchaser is in breach.
Unless a s "66W certificate" is given at the time of exchange the contract has a 5 day cooling off period (see below).
What is "settlement"?
When contracts are exchanged they will usually state a specific date for "settlement". This is usual 42 days unless the parties negotiate something different (e.g. a longer or shorter settlement time). At settlement the contract is "completed". That means that the purchaser pays the balance of the purchase monies and the vendor must deliver title for the property to the purchaser. More often than not there are both incoming and outgoing mortgagees who get involved.
Mostly settlement occurs without any problems but sometimes (for example) an incoming mortgagee can have concerns about the execution of documents or (very infrequently) there are impediments to title including the late registration of a caveat.
You are not required to attend settlement and we organise this on your behalf.
What is the "cooling-off period"?
In accordance with s 66S of the Conveyancing Act 1919, purchasers are granted a five day business period in which the purchaser can pull out of the contract and not continue with the purchase. The cooling off period occurs the next business day after exchange of contract and is also a good opportunity to make any final enquiries about the property before committing to the contract.
If you decide to pull out of the contract, a notice of rescission needs to be sent to the vendor’s (usually the vendors solicitor) before the expiry of the cooling-off period. The purchaser who rescinds forfeit 0.25% of the purchase price to the vendor. The vendor does not have this corresponding right to pull out of the transaction during the cooling off period. The cooling off period only gives rights to the purchaser.
Under s 66S, vendors have the right to not allow or shorten a cooling-off period. If this is the case you must supply a s 66W certificate to the vendor, which must be completed by a solicitor. In that circumstance that no cooling-off period exists and the purchaser is bound to the contract on exchange.
There is no cooling off period on the purchaser of a property at auction (s 66T).
What happens if either party cannot settle on the due date?
Failure by either party to settle on the settlement date is very serious. The primary reason for such a faiure is when the incoming mortgagee is not ready with the balance of the purchase monies. The general procedure following failure to complete by the purchaser are usually set out in the contract but there are other consequences included in general law. The standard form of contract allows for the vendor to serve a notice on the purchaser requiring them to complete within 14 days and "time is of the essence". If the purchaser doesn't complete at that time (including the payment of interest) the vendor can rescind the contract and keep the deposit monies!
For that reason ensuring you finance is approved prior to exchange of contracts is a crucial step for any purchaser.