While the language of property contracts is slowly evolving into plain English (as opposed to legal-speak), there is a limit as to how simple they can be, while still properly informing and protecting the parties involved in the conveyancing process.
It’s our job as the Conveyancer to understand and interpret this information for you, however knowing a few of the basic terms yourself, can only benefit you as negotiations commence.
Contract of sale
This is the legal document that outlines the details of property being sold and the agreement between the vendor (the person or entity selling the property) and the purchaser (the person or entity buying the property).
The contract of sale may include information such as:
- Purchase price
- Special conditions (i.e. penalties for late completion, auction rules etc)
- Finance clauses (if agreed to by the vendor)
- Title searches, deposited or strata plans, Council planning certificate and water authority information (ie. sewer main diagram)
- Strata/Community plan information such as by-laws, changes to by-laws & management statements (if applicable)
- Existing tenancy agreements (if applicable)
Certificate of Title
This document will show the Lot number and Plan number for the property and will show the full name of the current owner of the property.
It also shows (where applicable):
- Third party interests in the land (such as mortgages, caveats & writs).
At the change of ownership, the new owner details are registered on the Certificate of Title.
Depending on the vendor’s instructions, contracts may be exchanged with a cooling-off period. In this scenario, the purchaser will have the right to pull out of the contract during the cooling-off period following the exchange of contracts.
The typical cooling off period is 5 business days. For example, if you exchange contracts on a Friday, then your cooling-off period would expire at 5pm on the next Friday.
This is the period where you can complete any specialist inspections (pest & building/strata records etc) and to ensure that your finance has been formally approved and to seek advice from us with regard to the terms of the contract of sale.
As with anything, there are pros and cons for every situation. The main benefit being that you have secured the property (the vendor does not get a cooling-off period), however, be mindful that if you “cool-off” (ie. pull out of the contract during the cooling-off period) then you will forfeit 0.25% of the Price of the property to the vendor.
There are circumstances where you may not be entitled to a cooling off period. Typically, this is when the property is bought at auction, but sometimes high demand for a certain property may mean a cooling-off period is not accepted.
This is the right of a person to use part of another person’s property for a specific purpose. It also refers to the right to stop the property owner from using a part of their property in a particular manner.
Easements, such as a right of way, drainage or utility, can restrict the manner in which the property is used.
Any easements affecting the property are discussed with your conveyancer, to ensure you fully understand how it may affect the property in question.
Completion Date (also known as the Settlement Date)
The date on which the property title is legally and officially transferred to the purchaser. The balance of the purchase price and any financial adjustments and payments, like land taxes and council rates, will be made on the settlement date.
You don’t need to be present at the settlement. The legal representatives take care of this (in person or online).
Once a settlement is confirmed to have successfully occurred, all parties are advised and the purchaser may arrange to collect the keys, normally from the real estate agent.
That’s what we’re here for.